In the week when Michael Gove showed his true colours, admitting he used to campaign for Labour, thus explaining his far left leanings in the Conservative Party, Reform UK announce that they will introduce the Britannia Card for Non-Doms. A single entry £250,000 per decade fee so that non-Doms can avoid paying UK tax on their non-UK earnings.
Gove led the abolition of the non-Dom status, followed closely by the Labour party, resulting in billionaires and multi-millionaires flocking out of the Country. The Far Left are already claiming that the Britannia Card will cost the country £34Bn, as calculated by far left TaX Policy Associates. What a load of Twaddle! The IFS has already demolished those figures comprehensively.
Labour’s original figures, now widely known to be flawed, like most of “Rachel from Accounts” other figures originally said that abolishing non-dom would bring in £33.8Bn (uncannily close to the figure calculated by Tax Policy Associates), assuming ridiculously that all non-Doms would stay in the UK.
Following an almost unprecedented flight of capital from the UK, the Labour Party had to acknowledge that “at best, abolishing non-Dom was tax-neutral” but many believe that the true damage is huge and subsequently as the flight of billionaires and multi-millionaires continued even a year later, the damage continues. Billionaires and multi-millionaires are leaving at an unprecedented pace with over 10,000 gone since Labour got into power.
Even the Adam Smith Institute, one of the world’s leading think tanks, recognised as the best domestic and international economic policy think-tank in the UK and ranked 1st in the world among Independent Think Tanks by the University of Pennsylvania, calculates that the cost of non-Dom abolition is a whopping £6.8BN to date, and that is before you add in what growth those many Billions, if left in the UK economy, would create.
In practice, the reality is that, due to the recent abolition of the non-dom regime, coupled with Labour’s threat of an “exit tax”, any Government would struggle to persuade the very wealthy that the ‘Britannia card’ would really provide a lifelong exemption, so take-up would be very limited. With any prospect of the UniParties getting back into power, given their record on non-Dom attacks, who in their right mind would repatriate their funds. There would have to be a really good cast-iron guarantee.
In fact, the left-leaning Guardian newspaper described the idea as a ‘’masterpiece’’. According to the Henley Private Wealth Migration report, Britain will lose a record 16,500 millionaires this year. That’s twice as many high net-worth individuals as China will lose and ten times as many as Russia.
Compare this with those Starmer wants to incentivise, …..boatloads of young men with different cultural and educational backgrounds, living rent-free, working only in the black economy where they don’t pay tax and expect to be housed free as they don’t have a penny between them. Throw them out DEI – Deport Every Illegal – and bring in the super-rich!
The top 1% currently pay 30% of the total tax take with a 45% tax rate, compared with the 1970s when the top 1% paid 15% of the total tax take with a 95% tax take.
The card would also provide a very large tax windfall to a small number of very wealthy people – some of whom are already here, and the OBR (Office for Budget Responsibility) shows that they would have to be excluded. The reality of the Britannia Non-Dom card is that it can only add to revenue. If you are already here then you would be unlikely to qualify for the Britannia Card as reform said it is for “New Non-Doms” so anyone already here is either already paying tax on their wealth or has hidden it away offshore out of sight of HMRC.
Nigel Farage and Reform’s former chairman Zia Yusuf insisted that the scheme is already garnering interest and will “attract new money” to the UK from those who have left the country or do not want to come because of high taxes. “Over the last few years, a political narrative that has got stronger and stronger is tax the rich”, says Farage, “and the proposals seem to imply reintroducing the concept of domicile. That would be a mistake. Domicile is a problematic concept that is based on nebulous, subjective and difficult-to-prove criteria such as where one intends to reside permanently. Basing taxation on residence – an objective and observable criterion – is preferable. The proposed regime will move the UK back to a system of taxing based on remittance, i.e. whether foreign income and capital gains are brought into the UK. As the Britannia Card covers new money into the UK it all but guarantees a net positive outcome for the Treasury.”
The result, it would be relatively attractive to non-doms with high offshore wealth, but not necessarily to those who want to invest that wealth in the UK (because remitting money to the UK brings it within UK taxes).
The OBR says that much of the cost depends on how many of those paying the £250,000 fee would have been in the UK anyway and how many come to (or stay in) the UK in response to Reform’s policy. Those attracted to the UK by the policy would typically end up paying a large amount of tax on their UK income (on top of the fee for the Britannia card), benefiting the Exchequer, but for those who would have been in the UK (and paid tax on their UK income) anyway, the exchequer would lose the tax they would otherwise have paid on their foreign income and gains, although for most people the payment of £250,000 would be less than their tax on worldwide income.
The relative sizes of those two effects would be key. The overall revenue effect would also depend on whether those who do not buy a Britannia card would still see their foreign income and gains being exempt from UK tax for their first four years of residence in the UK, as under the regime announced last year – and, if not, how the extra tax payable in those first four years by those who would come to the UK anyway compares to the loss of revenue from those who leave (or don’t come to) the UK as a result of that tax rise.
It is also the case that providing lump-sum payments to low-paid full-time workers would face serious administrative challenges as amazingly HMRC currently has no way to identify whether a self-employed individual is working full-time. The only way would be to ensure that anyone entitled has to be working a full 40 hour week. For many of the self-employed, they do work a lot more than 40 hours per week although unlike employment, not all 40 hours are remunerated.
but that raises an entirely new issue. Welfare reform, whichever party enters the next Government, will need radical reform where unemployed welfare and benefit is drastically curtailed, and where the low-paid worker is only topped up where they are working 40 hours a week. It is quite ridiculous that the average working wage is £42,000 which after income tax, national insurance and council tax leaves the average worker on less than £38,000 when someone sitting at home on their arse, claiming benefit, housing benefit, child allowance and free child care can get nearly £34,000. Whatever colour the next Government is, the maximum state benefit including housing and child allowances will have to be curtailed to 50% of the net average take-home pay or less.
The Reform policy does have a major benefit, it would benefit the lowest-paid full-time workers, but not the lowest-income households, because the lowest-income households generally have someone on benefit and not in full-time work (particularly non-working partners). Those who choose to have non-working partners, particularly with the new wrap-around childcare provisions will be heavily hit by the welfare changes and the fear is that this will hit certain minorities higher because these minorities try to avoid the female in the household working due to long-standing custom brought into the country from overseas. The policy would provide an incentive for people to move into (or stay in) full-time work and the welfare system changes will encourage low earners to increasing their earnings as they will always have a higher disposable income at the end of the week.