Under the government’s proposed changes to the domicile rule any person who qualifies as non-domiciled can pay £30,000 to secure the right to not pay tax on their world wide income in the UK.
This £30,000, it must be stressed is not a payment of tax. No other country will recognise it as such under double tax treaties. This is sure evidence it is not tax.
In that case, what is it? I’d call it a payment to secure a favour: the favour is not paying tax. In that case a bribe is the closest thing I can think it akin to. After all, they’re very often a payment to a government to ignore the legal obligation normally imposed upon a person and to turn a blind eye to what is actually happening. We see this sort of payment in many countries in the world where benefit is secured by payment of a sum to obtain advantage unwarranted under the law. And we call it corruption.
Do we really want to introduce that principle into the UK? Legitimising it may make something tawdry acceptable to our courts, but will it make it acceptable in our sight? I don’t think so. To anyone with the eyes to see this will appear to be something little better than the standard back-hander which has destroyed the concept of sound governance in so many countries around the world.
Do we really want that sort of corruption, here? I sincerely hope not.
There is only one answer to the domicile issue: this rule has to go.