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UK Budget: Clampdown on non-doms

Wednesday 23 March 2011 - by Nicola York

UK Chancellor George Osborne is clamping down on long-term residents claiming non-domicile status by charging them £50,000 a year if they have been resident in Britain for 12 years.

Currently non-doms are charged £30,000 annually if they have been resident in the UK for seven years. This was brought in under the previous Labour Government.

Osborne said this latest move would raise £200m for the Treasury. The charge will be removed for non-doms who have moved here specifically to invest in British firms.

The Chancellor said he could confirm he would not be making any further changes to the non-domiciled tax regime in this Parliament.

He also announced measures to tackle tax avoidance including action to prevent attempts to disguise employment income, which will raise around £4bn over the Parliament.


Osborne said this budget was doing more to clamp down on tax avoidance than any Budget in recent years.

Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants says: "If the Coalition intends to chase down abusive tax avoidance, then it needs a solid infrastructure to deal with it.

"Their new strategy paper on tax avoidance will make it clear how this is going to be done. Given the state of the economy this extra £1bn per year will be welcomed. As a portion of the tax take, it will be needed to fund the growing benefits and allowances bills - such as unemployment benefit.

He added: "Non-doms being given a tax incentive to repatriate profits through investment in UK businesses could be a good move too. The 12 year £50k levy is reasonable and a statutory definition of residency is welcome."


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