A “significant number” of the UK’s wealthiest tax payers are already enquiring about exiting Britain following Labour’s plans to all but scrap the non-dom tax status, warns the boss of one of the world’s largest independent financial advisory organisations.
The warnings from deVere Group’s founder and chief executive, Nigel Green, come as Ed Miliband on Monday set out his party’s manifesto to woo voters at May’s general election.
Mr Green comments: “Ed Miliband’s promise to essentially scrap the non-dom tax rule if Labour wins in May is already having an impact. Our consultants in the UK report that a significant number of wealthy clients have indicated since the plans were mooted that they would exit Britain if Labour’s plans went ahead.
“Whilst it is impossible to put a figure on how many would do so, Britain would become considerably less attractive for them and therefore, it can be reasonably assumed, many of these people – who have the resources to do so easily and quickly – would simply relocate with immediate effect. They could be based somewhere with a more competitive tax regime and then just return to the UK as and when they desire to enjoy its other benefits on a ‘tourist’ basis.
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“This reaction to such an utterly misguided policy was to be expected, yet I am surprised at the speed at which so many individuals have responded.”
He continues: “This move is dangerously naïve. It highlights Labour’s lack of awareness of how things work in the real world.
“This policy would undoubtedly deter top international talent from coming to Britain and prompt many wealthy and successful individuals to exit the country – people who contribute a disproportionately high amount to the Revenue both directly and indirectly.
“Indeed, the loss of these individuals’ wealth would, ultimately, hit the less well-off in our society the most – the very people Labour are purportedly trying to stand up for – as there would be less tax revenues for the government to fund the already overstretched welfare system, amongst other things.”
Last week Mr Green issued a statement saying: “Rather than attack the non-doms, I would suggest that a better solution would be to ultimately cut the tax burden for everyone. This would allow Britain to be globally competitive without affording certain people additional privileges.”