The Observer continues its domicile campaign

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The Observer seems intent on continuing its campaign against the domicile rules. Good, say I.

Yesterday's paper featured a long article on the subject which said among other things that:

And tax experts confirm that there has been a dramatic surge in claimants in recent months - prompted, ironically, by a Treasury and Inland Revenue crackdown on UK citizens holding offshore accounts.

'People are telling the Revenue that they meant to sign non-dom forms - that not filling them in was an oversight. The amnesty is pushing people further offshore,' says one tax expert.

That expert is right. The Revenue response was:

'We cannot comment on whether any increase in non-dom applications is prompted by offshore arrangements or is linked to stamp duty avoidance. The latest figure published in Hansard for those who claim non-dom status on their tax returns relates to 20004/05 and is 112,000. We are compiling comparable figures for 20005/06 at the moment and expect a figure to be available later on in the year. We cannot speculate as to whether it will be higher or lower than the 2004/05 figure, nor can we speculate on the reasons behind any increase or decrease.'

Predictably a City person said:

'It's part of the environment. My understanding is that it's reasonably prevalent in the City. To be honest, it's seen as one reason why London has continued to be successful as a venue for high-value employees who can be located anywhere in the world. I think it's why a lot of businesses like to be based in London; there's a strong sense that if it was to be removed an element of the [City's] attractiveness would lessen.'

But even there,as the Observer notes, it causes problems:

In addition, it is a source of resentment within the City. Two employees can be paid the same amount of money gross, but take home vastly different salaries as a result of the rules.

And someone (and you might know who they're referring to here) is noted as thinking:

the non-dom rule is harmful because it widens the gap between rich and poor, which has increased sharply in the last 10 years.

And that's indisputable. As is the increase in non-dom applications, which I know to be true as well. The rest is mere conjecture. Which is why the argument for abolition grows by the day. Indeed, the more applications there are the better the case for getting rid of it. So let them roll, I say. They just prove how abusive this rule is.