Chancellor to take on the Non Doms

Mar 13 2008 Liverpool Daily Post

The plans have drawn fire from business leaders fearful that London’s status as a financial centre could be hit if the move went ahead.

The Chancellor’s bid to close the controversial tax loophole, where “non-doms” are not subject to tax on their overseas earnings, were first announced in October’s Pre-Budget statement.

Budget figures published showed the Treasury expects to make £1.2bn in total from the changes by 2010/11.

The £30,000 levy to claim the favourable tax treatment will apply to those who have been resident in the UK for seven of the past 10 years, while the Government is also to tighten up residency rules so that fewer people are able to claim it.

But, after consultation on the new rules, Mr Darling said “non-doms” would be able to offset the charge against foreign tax. Those with offshore income of less than £2,000 will be excluded, with other loopholes for art sales.

The Chancellor also effectively ended his pursuit of the “non-doms” yesterday by saying the new rules would not be substantially revised for the remainder of this parliament and the next.

City of London policy chairman Michael Snyder welcomed Mr Darling’s commitment to “leave well alone” but added: “We need to be sure that the detailed HM Revenue and Customs rules to implement this do not – even inadvertently – do any further damage.

“The City now needs to re-establish its long-held reputation around the world as a welcome place for wealth-creators and knowledge workers.”

“Non-doms” exploded as a political issue last year after Conservative proposals to deal with the loopholes. Mr Darling was accused of copying the Tories in making his own announcement a week later.