Domicile: Pragmatic question 1: Will people go?

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Yes. Of course they will. It is inevitable that some non-domiciled people will leave the UK after the change in the tax law affecting their status. But let's put this in perspective As a matter of fact non-dom people leave all the time. To be non-dom you have to make a statement that you do not consider the UK your permanent home. It therefore follows as night does day that some will be leaving, all the time.

So, the question of whether some will leave is not the right one. What we need to ask is whether those who are leaving are doing so for this reason, and if just 4.5% of all non doms plan to go soon because of this I'd suggest that given that this is just 1 in 22 of them that's probably less than the normal attrition rate and so no cause for alarm.

Then there's the obverse question. Will the non-doms stop coming? Some will. Absolutely certainly. But let's be clear, have we ever wanted to attract business to the UK that is so marginal it needs a tax subsidy to lure it to our shores? Because that is what this really means. Some people who would come here with a tax subsidy (and the effect of not paying full rate tax is exactly the same as getting a tax subsidy) won't come because of the change. And quite probably that's a good thing, I reckon. I don't want people here who's only reason for choosing is to secure a tax benefit. I want them to come to add value, not detract from it.

More than that though, tax subsidies are wholly misplaced when there is no need to subsidise the activity at which they are directed. Financial services and the south east of England are making the biggest fuss about the loss of this subsidy from the domicile rule. But in practice financial services are growing rapidly and ate highly profitable: it appears to have no need for a subsidy at all. The south east of England has an over-heated economy. It likewise appears to have no need for a subsidy. Loosing some new entrants into both of these overheated sectors may be of benefit to our economy.

On balance, the evidence for loss from departures is slim. The evidence of loss from non-arrivals looks decidedly unlikely.

But I accept, this argument can't be proven for certain, and never will be. But the chance that there will be a catastrophic loss' as some have claimed is simple emotional blackmail and should be ignored as such, not least because it lacks any evidential support.

And I'm far from being the only person to say so.


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