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Lord Mayor: New tax will drive away the non-doms
Simon English, City Correspondent06.02.08
The Lord Mayor of London launched a scathing attack on Alistair Darling, warning that hundreds of rich foreigners could quit the UK over his controversial new non-dom policy.
David Lewis criticised the Chancellor's plans for a new tax regime that would see non-domiciles charged £30,000 a year to remain in the country.
He said the prospect of a mass exodus of wealthy businessmen was creating "real anxiety" in the City.
Speaking to a City dinner, hosted by the Worshipful Company of International Bankers, Mr Lewis said the move would damage both the economy and the Labour Government's relationship with the City.
He said: "Very many people simply cannot understand why we are risking the loss of so many talented people from the UK for the sake of the possibility of a relatively paltry tax receipt by the Treasury, which it will probably never receive."
Mr Darling was at the dinner, but the Treasury declined to comment on his reaction.
At the moment, so-called "non-doms" only pay tax on income and capital gains from offshore assets that are remitted to the UK. Mr Darling hopes the £30,000 fee will reduce anger at how little tax very wealthy foreigners pay to live in London.
However, the Lord Mayor said accountants are already advising rich clients to move to Switzerland or elsewhere. Although £30,000 is a small amount to the multimillionaires it would affect, there is a fear that it is just the first of many such rules.
Karina Challons, the head of tax at HSBC Private Bank, said: "The £30,000 charge might not be that much of a bother for the ultra-wealthy but people are concerned that this is the start of a much more aggressive approach."
The Treasury is also said to have its eye on offshore trusts and companies. Tax advisers warn that traffic problems, house prices and bad weather are making other locations appealing to the super rich.
Mr Lewis's speech was well received by the audience which included former Bank of England governor Lord George, former Barclays chairman Sir Peter Middleton and Sir Brian Pitman, the former head of Lloyds TSB.
The Government argues that non-doms should make more of a contribution to the public coffers. City grandees insist they are contributing to the economy in other ways and that it would be folly to try and force them out.
Reader views (1)
Who told the clueless Mr Darling that non-domiciled is the same as ultra-wealthy? I am so far from the latter that unlike Peter Hain I would find £100,000 hard to miss. I have a business here which employs local people and services. It will be closed and I'll go elsewhere. Net gain to the Treasury is negative--I pay tax on my UK income and so does my company. Neither will be going to the Treasury in future, nor will the £30,000 Mr Darling is counting on receiving from me or the £30,000 he's expecting from my wife. Well done!
- Non Dom, London
