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Political correspondent Joe Pike reported that Reform UK has introduced a new proposal that would allow non-doms to lessen their UK tax burden by paying a £250,000 fee. The party suggests that the revenue generated from this fee would be directed towards individuals with the lowest incomes. Non-doms, who have a permanent residence overseas for tax purposes while residing in the UK, would be able to obtain a Britannia Card by paying the fee, allowing them to avoid being taxed on wealth, income, or capital gains earned abroad, as well as circumventing the inheritance tax.
Labour Chancellor Rachel Reeves criticized this plan, labeling it as a “tax cut for foreign billionaires.” She raised concerns that Reform UK would need to increase taxes or reduce public services like the NHS to make up for the loss in revenue. On the other hand, Reform UK defended its proposal, stating that the funds collected through this measure would be distributed tax-free each year to the bank accounts of the lowest-paid 10% of full-time workers.
Reform UK leader Nigel Farage highlighted the potential benefits of the policy, suggesting that it could attract numerous individuals to the UK. He emphasized that these individuals, including entrepreneurs and job creators, would contribute significantly to the economy. However, concerns were raised by Dan Neidle, founder of Tax Policy Associates and a Labour member, who estimated that the policy could lead to a substantial loss of revenue. Neidle also pointed out that foreign professionals might be discouraged from relocating to the UK if they cannot afford the £250,000 fee under Reform’s scheme.
In response to this proposed policy, the Labour government announced its intention last year to abolish the tax status benefiting non-doms. This move aimed to eliminate the loophole that allowed wealthy individuals to save money by choosing a lower-tax country as their permanent home. Chancellor Rachel Reeves mentioned that adjustments may be made to the policy following feedback from the non-dom community and concerns about wealthy individuals leaving the UK. The government projected that its set of measures would raise £12.7 billion over the next five years, compared to the previous system where non-doms paid an annual fee based on the time spent in the UK
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