If all the claims made are to be accepted as true (and that's a massive 'if' - since most of them are not) then most UK non-doms work in the City.
Actually, I can say for certain that's not true. The idea that there are about 7 million non-doms in the UK (which I first introduced) now seems pretty generally accepted in press comment. The ones talked about, and who might work in the City, are the ones who have claimed that status for tax. That's 112,000 of them, or thereabouts. It's rumoured that 40% of Goldman Sachs is non-dom. But even that is not extraordinary. I am sure there are whole fields of workers in East Anglia who are non-dom, and not claiming it.
The point is, this tax benefit is going to the City. It may be successful. But let's be clear, it's also the most profitable sector in the UK economy. The non-dom rule reduces its cost of employing foreign workers. Why do we a) want to subsidise the City when it is so profitable already b) want to put barriers in the way of the City employing domestically trained and resident staff c) wish to attract people into a sector at time when, to be candid unemployment in that activity looks likely and we should be favouring our domestic people if jobs are to be retained for anyone?
The domicile rule makes no sense against any of these criteria. It has to go.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
This is another classic. The pragmatic answer to the question is of course “because the City is the heart and lungs of our economy, financial services are the heart and lungs of our economy, the City generates a vast portion of the UK’s tax take and if we undermine the non-doms we will get less tax because the City will suffer.” You have to understand, Richard, that financial services are a mobile industry. Investment banks enter into tax equalisation agreements with their employees. They bring employees into the country for projects. If the personal allowance is abolished for non-doms, that costs the banks so they will simply do the projects elsewhere more cost effectively. Common sense (if you think about it). At the management level, more than 50 percent of the bankers are non-doms; these are the guys generating the wealth so we actually need them here. We cannot take a needless risk in hammering these people especially at a time when the economy is heading for trouble. As for UK trained staff, I wish I had your confidence in our education system!
The evidence right now is that the City has destroyed vast amounts of wealth.
Tell me why we need high-paid, freeloading, reckless gamblers as the basis for our economy would you?
I stress: I am pro-market and know the value of the financial sector. Much of the City is neither: it is about short term opprtunism. That is as I decribe it. Most of the non-doms seem to be in this so called ‘investment banking’ sector that appears to have created nothing of lasting worth.
What benefit can it bring?
Equitable taxation, undertaken openly and accountibly creates open markets. These create real value. Why not try promoting them instead?