I first started writing about the need for abolition of the domicile rule on this blog in March 2007. Since then I have done so more than 170 times. I made a Radio 4 programme on this issue. I have persuaded others, such as the TUC, to adopt the abolition of the rule as policy. And I have mentioned it numerous times elsewhere.
I am not for a moment saying that Labour's planned abolition of the domicile rule is a direct result of all that campaigning. But I take quiet comfort from the fact that at last a major political party has committed to ending this pernicious rule and will notch that up as another success for the tax justice movement.
The change has, of course, to happen as yet, and that requires Labour to be in government. That's not guaranteed at present. But I cannot help but think that this very clear statement in favour of tax justice for the UK is a tipping point: it is hard to see how this move will not be matched by other parties now. And if it is not it will be very hard to see how they justify the continuing injustice during a very tight election campaign.
It's my belief that on balance of probabilities the domicile rule's days will soon be done, and I can't help but say I am pleased, and thank Labour for its bold initiative.
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Richard
I so want this to happen but I am disappointed that Labour have waited so long to take this stand on such a significant issue. It smacks more of last minute vote-catching than real commitment to tax justice, but maybe I just don’t understand why major announcements are timed the way they are during an election campaign.
Better late than never
This is great news! Thanks for you work on this; now we have to make sure it happens. You have to wonder why Labour have not promised this before. Lord Dacre and the Daily Mail won’t like it!
Will the Swiss welcome all these tax dodgers if they choose to move there?
They won’t
Portugal, maybe?
http://www.telegraph.co.uk/finance/personalfinance/special-reports/11519095/The-ultimate-pension-freedom-Retire-in-Portugal-and-reduce-your-tax.html
Sorry, dumb question I know. But Why wont they??
What?
Why wont the Swiss welcome them with open arms if they chose to move there?
They won’t go
The evidence is very strong that most people do not move for tax
Some will
But not many
Its garbage to argue they they won’t move for tax when one is talking about such a large tax differential
If Labour’s plans are based on your advice then they need a new advisor
Except the evidence is very clear: people do not move for tax
Richard,
In order to ensure compliance with the not only the letter of the law in a non dom change, should we also strive to ensure the spirit of the law is adhered to by also simultaneously introducing an exit tax on anyone seeking to shirk their societal obligation and fleeing to Ireland, Switzerland, etc?
Not allowed under EU law
Oh dear. The big problem has been revealed. Ed Balls has made it clear that removing the non-dom status will actully cost the country money. Now, as long as everyone here agrees that that is a price worth paying to have a level playing filed and “fairness”, that’s great. Just don’t say that it’s a good move AND that it will raise money. and please also admit that Labour have been revealed to be liars by all of this. (I would have more respect if they just admitted that it was an unfair tax break that needed to be removed even if it will end up costing the country; likewise for the 50% tax rate).
Except Ed has been persuaded it will raise money, by people like me – and all you have is rhetoric and we have reasoned argument
So you’re wrong
As you also are on the 50% tax rate
1. It’s unclear whether it will raise money because the behavioural impact is unclear. People like Labour and Richard clearly think it will. The Tories clearly think it won’t. My uninformed view is that it is wildly unlikely to result in less tax being paid. It just might not raise that much.
2. The fairness argument is a good one. Why are rich people allowed to pay tax. It’s regressive and wrong.
3. The 50 per cent rate didn’t cost the country money. The HMRC evaluation of it said that (1) it would probably bring in less than the £2.5bn it was intended to bring in, (2) it would likely bring in £1bn “or less” and (3) This was solely because people adjusted their behaviour because they knew that the Tories would abolish the band or to avoid the band’s initial implementation. If it was put in at the start of a Labour government, it’s pretty clear that this behaviour couldn’t work in the same way
Richard
Given your diligent campaigning record on this issue, you are entitled to feel that you have made an impact, especially since you’ve been at this since 2007 when questioning these practices must have been a lot harder then.
So here’s congratulatory hug from me (cue ‘congratulatory hug’).
Jolyon has also blogged on this recently http://waitingfortax.com/ .
I’d be interested in his and your comments when and if the new proposal is revealed by Labour in detail.
I still need to be assured that Labour will really do something about this given that they were in power when the Lichenstein Disclosure Facility was initiated.
I do hope Labour are now LESS relaxed about how people become rich than they used to be.
But, nonetheless, this is a welcome step in the right direction and it is about fairness for me, not envy.
I can only be pleased now
If Labour does not deliver I will be critical
That would then be my job
They might
The new diverted profits tax is already changing corporate behaviour as it’s so vague and badly drafted it’s introduced uncertainty. People are choosing not to locate hubs in the uk but rather elsewhere in Europe because of it. The loss to the uk treasury is impossible to calculate but loss there is
Some non doms may well decide not to come to the uk and spend their money here. We will never know how much the uk treasury has lost. As for current non doms in the uk, I rather suspect the increased tax take from them is not going to be material
I have argued against the DPT
And you utterly miss the point that changing the domicile rule is good fro British business – level playing fields and limiting tax abuse always fuels growth
With respect, all you have is rhetoric until the rule is changed and you measure how much tax it raises. To call your guesstimates reasoned argument is pushing it a bit far.
It’s the basis on which all tax policy is decided
Indeed, if it happens. As the Telegraph reported some years ago:
.” Gordon Brown won’t get a grip on rich men’s tax-dodging when close adviser Geoffrey Robinson used offshore trusts and Sir Ronald Cohen [who bankrolled Mr Brown’s leadership campaign] conceals whether he is domiciled in Britain for tax purposes.’
Meanwhile Lord Mandelson sought out the company of oligarchs. He AND ‘s now going into business with Dmitri Firtash who is currently detained in Austria