Nicky Morgan just gave an awful interview about non-dom tax status which confused everyone

Education Secretary says non-doms should pay tax, while George Osborne says that would be a disaster

The Conservative policy on whether people with non-dom status should pay tax has been thrown into confusion after a bizarre and contradictory interview by Education Secretary Nicky Morgan.

George Osborne this morning warned that Labour’s plan to end non-dom privileges would damage UK competitiveness and “would cost our country hundreds of millions of pounds in lost tax revenues and lost investment”.

But in an interview on BBC Radio 4 Ms Morgan, also a Conservative, said that non-doms should in fact pay tax on all UK earnings.

“People who are based here should pay their taxes here … I don’t think anyone would disagree that people should be paying taxes here,” she said.

Asked to clarify whether UK residents with non-dom status should pay tax on overseas earnings Ms Morgan told the programme: “That’s exactly what we have said.”

Listeners took to social media to speculate the Ms Morgan may not have been properly briefed on her own party's policy.

Others castigated her for failing to answer questions and appearing not know what what non dom status actually was.

Non-domiciled status applies to people who actually live in Britain but are not domiciled here for tax purposes.

For a flat annual charge of £30,000-£50,000 it is possible to opt out of tax on overseas earnings.

The arrangement is used by the international super-rich and can lead to dramatically reduced tax bills for those with businesses registered in low tax jurisdictions.

Mr Miliband will today say: “We don’t compete in the world by offering tax advantages to a few that we don’t give to all our citizens and businesses.

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George Osborne said getting rid of non-dom status would damage Britain's tax competitiveness

“It is not fair on all those millions of working people and businesses who pay their share and play by the rules. And it’s not fair on all the people who rely on our public services either.”

The announcement by Labour appears to have taken the Conservative off-guard.

George Osborne said: “The small print of Labour's policy makes clear that they are not actually abolishing non-dom status.

 

“Either they are going to abolish non-dom status altogether which would cost our country hundreds of millions of pounds in lost tax revenues and lost investment - the reason they did nothing on this during 13 years in office.

“Or they are just tinkering around the edges and making small adjustments to the rules on how long people can be non-dom.”

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