Domicile » Tax Research UK

Restricting the rights of non-doms

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Jun 172009

Lords vote to get tough on political donations from non-residents | Politics | guardian.co.uk .

Peers last night voted to ban non-residents and so called “non-doms” from donating to political parties, in defiance of the Labour and Conservative frontbenches.

A backbench Labour amendment, designed to force the Tory donor Lord Ashcroft to clarify his tax affairs, was passed by 107 votes to 85, a majority of 22.

The amendment to the political parties and elections bill, tabled by the former Labour MP Lord Campbell-Savours, was based on an amendment which was blocked from debate in the Commons. The vote last night means that MPs will be given a chance to debate and vote on the issue.

Quite right.

No representation without taxation.

Turkeys don’t vote for Christmas

Domicile, KPMG 3 Responses »

Mar 132009

And non-doms say tax is a bad thing. Or, as a KPMG survey reports, non-doms have revealed the extent of their dissatisfaction over being charged tax. Apparently:

One in four non-doms set to quit the UK
More than 90 percent say tax changes damaged the UK’s competitiveness

Now let’s deconstruct that. First, as a matter of fact all non-doms are required to quit Britain. If not they’re domiciled. So the rules appear to have brought 75% within the UK tax net. Great!

Second, who the heck are the people who think they have a right to define our competiveness in terms of their non-tax payment?

I have a response to this: it’s undiluted drivel.

The Swiss can get rid of tax breaks for foreigners. Why can’t we?

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Feb 092009

The Economic Times of India has reported:

Voters in the region of Zurich, the home of Swiss banking, sprang a surprise on Sunday by deciding to abolish tax breaks for rich

foreigners living there, including show business and sports stars.

Some 52.9 percent of voters — more than 216,000 people — backed an initiative launched by the left-wing Alternative List to abolish “tax privileges for foreign millionaires” in the canton.

The UK failed to get rid of its domicile rule. But even some of the Swiss can.

Surely it’s time we did the same, once and for all?

Residence, domicile and Marmite

Domicile 1 Response »

Oct 292008

I’m writing on residence and domicile at TaxationWeb:

In my opinion, the approach you adopt to the question of residence and domicile is a bit like the proverbial Marmite question. It creates clear and unambiguous divides between those involved in the debate.

You may not be surprised to hear that I suspect I’m not on the same side as our professional institutes.

Do you remember the Domicle debate?

Domicile 4 Responses »

Oct 102008

Do you remember the domicile debate and how almost all accountants argued that we had to keep our favourable tax treatment so that all those bankers, private equity operators and hedge fund managers would stay in the UK to create wealth for us?

Don’t you just wish that we had abolished the rule? Don’t you just wish that those bankers and their friends had all fled, taking their accountants with them?

Think how much better off we would be today if we had won that debate.

One can only hang one’s head in sorrow at the cost The accountancy profession has imposed upon our country.

Inequality harms children

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Aug 202008

The TUC has published a briefing revealing that inequality is just as damaging to children as poverty, and harms their health, education and well-being. As it says:

Poverty and inequality and children finds that, while the UK has had some success in reducing the level of poverty over the last decade, progress on social inequality has been much more muted. Over the last 30 years inequality has grown rapidly in the UK, and the gap between the top tenth of the population and the bottom tenth has doubled since 1979.

Inequality in the UK has not only grown over time, it is high internationally. By European standards the UK is a very unequal country; Ireland and Italy have the same level of inequality as the UK, but Germany, France, the Netherlands, Sweden and Denmark are all significantly lower and no EU countries have a higher level.

Poverty and inequality and children includes international research by UNICEF which found that children’s wellbeing was significantly correlated to a country’s level of income inequality and the percentage of children in relative poverty, but not to a country’s or state’s average income. This suggests that reducing inequality would do more to promote children’s well-being than further increases in economic growth.

The briefing recommends reducing original income inequality, by:

Raising the skill levels of people with low or no qualifications;
Addressing discrimination against women workers, especially on the grounds of motherhood;
Removing the pay penalty that workers face if they work part-time;
Strengthening the position of vulnerable workers, by introducing stronger rights for agency workers, and better enforcing existing rights such as the national minimum wage;
Promoting unions and collective bargaining – most economists are agreed that weaker unions offer part of the explanation for growing inequality.

I would add that tax has to be part of the solution: those on lowest incomes pay too much. We need a genuinely progressive tax system. We have not got one. This is part of the solution. Abolishing the domicile rule is a first step on the way.

Don’t they know London died as a financial centre in April?

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Aug 122008

The FT has reported that:

TIAA-CREF, one of the world’s biggest money managers, is to open its first overseas office by setting up a base in London to step up investments in European property. The move signals foreign buyers’ growing interest in the region’s real estate market.

Do you recall that only months ago we were told that London would be dead if the domicile rule was changed?

That was wrong, as is almost everything the Right says on tax.

The new domicile rule won’t work

Domicile 2 Responses »

Jun 262008

KPMG have published a guide to the new domicile rule. It includes this fascinating flow chart:

I am not going to argue with one little bit of that. The fact is that it is not what is said that matters here, it is what is not said that matters.

There are two serious omissions. The first is any attempt to tackle the issue of the long-term low-paid migrant worker. Perhaps that is because they cannot afford tax advice.

The second is the glaringly obvious fact that this model is not sustainable.

I suspect that the first budget made after the 2010 general election, whoever is then in power, will see the rule change. It’s my bet but it will go, to be replaced by a better, statutory, definition of residence.

The UK: no place to quit

Domicile, Economics, Tax Havens, Tax management 4 Responses »

Jun 172008

Two curious reports this morning, both covered by the FT. The first says:

Britain is the most popular destination in Europe for investment by foreign companies , according to a survey published today – and is likely to remain so for years to come.

The KPMG survey of large multinational companies from 15 leading economies found that one in seven expected to make a significant investment in the UK in the next year – with only the US and China more popular as destinations.

Funny that: I thought everyone was leaving? Worse, I thought our tax system was so uncompetitive that no one wanted to replace those quitting. Can both be wrong?

Then this:

The downturn in the housing market is a factor persuading wealthy foreigners to remain in Britain, according to research that shows few non-domiciled residents are moving to escape the new tax regime.

Despite this year’s introduction of higher taxes for non-doms, Britain’s career opportunities and culture have ensured that it remains one of the world’s most attractive regimes, according to the study commissioned by Barclays Wealth.

But, surely, aren’t they all going as well? Isn’t that what we were told?

Or is it, as I’ve always argued, straightforward nonsense that people and companies will leave the UK because of tax. The evidence is stacking that I’m right.

In which case, let’s stop acting as if the protagonists are right from now on and and call the bluff of those who say they’re going. They know where the door is and the evidence is clear: it’s tougher the other side of it. They’re welcome to try it, but I don’t think they will.

In that case let’s do the next obvious thing and create a tax policy for the UK, not those who want to leave it. Is that too much to ask?