The following is the exchange of Parliamentary questions and answers on domicile raised as a result of the report I wrote on the UK's domicile laws being illegal under the Race Relations Act 1976:

John McDonnell: To ask the Chancellor of the Exchequer (1) what assessment he has made of the compatibility of HM Revenue and Customs' policy in relation to domicile and non-domicile tax status with the Race Relations Act 1976; (2) what legal advice HM Revenue and Customs received on domicile and non-domicile tax status and race discrimination laws in each of the last four years; (3) what plans he has to review domicile and non-domicile tax status; (4) how many UK citizens have non-domicile tax status; and how many investigations HM Revenue and Customs undertook into the tax returns of those with non-domicile tax status in each of the last 10 years for which figures are available; (5) how much tax he estimates was avoided by those declaring themselves non-domiciled in each of the last five years for which figures are available.

Dawn Primarolo: We consider that policy in relation to domicile and non-domicile tax status is compatible with the Race Relations Act 1976. All Acts of Parliament are subject to compatibility tests under the provisions of the Human Rights Act 1998, which considers issues of discrimination in their widest context. HM Treasury is leading the on-going review of residence and domicile as these affect the tax liability of individuals. No information is available on the number of UK citizens with non-domicile tax status or on the number of investigations undertaken by HM Revenue and Customs (HMRC) into the tax returns of those with non-domicile tax status. Overall, approximately 110,000 individuals claimed non-domicile tax status through self assessment tax returns in the year 2004-05. No estimates of potential UK tax liability are available. In general, individuals do not have to inform HMRC of their foreign income or gains unless this is relevant to their UK tax liability.

Let's be candid about this: Primarolo ducked the issue here. She's given no reason for her bland statement on why the laws are legal. She also says the Treasury have no information on the costs or benefits of the domicile laws. That means there can be no policy reason for retaining these laws. After all, policies aren't based on no information. In that case three things follow:

1. There is need for the type of answer Simon Sweetman called for yesterday;
2. The UK has to admit it has no policy justification for these laws, which means the prejudice cannot be retained on that basis;
3. So they either have to go or the UK has to admit its a tax haven.

There are no other viable scenarios.

Thanks to John McDonnell for asking the questions.