Outlook Labour voters might very well be saying “what took you so long” now it has promised to scrap the controversial rules that exempt non doms from paying any tax on money not made on these shores.
The answer, of course, is that whenever such a measure is mooted it is accompanied by copious amounts of bellyaching from accountants and others who service non doms. They’re now busily predicting doom for jobs/investment/tax revenues (delete as appropriate).
These are the same arguments that were trotted out when the flat fee of £30,000 plus for those claiming non dom status was introduced. And that were trotted out again when Chancellor George Osborne decided to raise it.
So far, there’s yet to be any compelling evidence produced that such claims have any weight. Non dom status is, after all, unique to the UK, the relic of an empire this country no longer has. Other countries offer no such concessions, and the rules that allow you to qualify for it in the first place are arbitrary at best.
In reality the likely impact of abandoning the rules will be really rather marginal. It might generate a few hundred million pounds of extra revenue for the Treasury at best. At worst, there may be some extra business for Switzerland’s estate agents while certain properties in Kensington & Chelsea will do without their inhabitants for a few months extra every year.
What really matters is the principle that is at stake, which is that tax shouldn’t be optional if you happen to be wealthy.
This principle has frequently been bypassed on the grounds that it is more cost effective to get some money paid, even if it really ought to be more.
This is the logic that has motivated HM Revenue & Customs to hand sweetheart deals to the likes of Goldman Sachs and to accept payments from those who’ve used bolt holes like Switzerland to hide their money rather than going through the expensive and time consuming process of prosecuting them. That might have been fine when things were rosy, but in an era of austerity it won’t wash. Which is why Ed Miliband might have hit on a winner, despite the accountants’ claims.
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