The Government is considering a new levy on non-doms as the Treasury seeks new revenue to fund lifting the income tax threshold, according to reports.
The Sunday Times says the new levy would replace the current £30,000 annual charge on non-doms living in the UK over seven years and could be used to lift the income tax threshold to £10,000.
The current levy was introduced by the previous Labour administration but has only raised £160m a year and led to 16,000 non-doms leaving the country, according to the report. Treasury documents suggest four out of five non-dom leave within seven years and so avoid the levy.
In opposition Chancellor George Osborne proposed a £25,000 flat charge for non-doms, regardless of how long they have lived here, and the currnet levy could be extended to all non-doms.
Business Secretary Vince Cable is expected to push the Treasury to impose a tax on non-doms’ worldwide earnings after they have lived here for seven years.
Speaking to The Sunday Times, Liberal Democrat Treasury spokesman Lord Oakeshott says: “Non-dom status is the biggest tax loophole in Britain. The £30,000 non-dom poll tax is a joke – it is only the tip they give the waitress after drinks in the directors’ box and Chelsea or Manchester United. We must redouble our efforts to makenon-doms pay their fair share… We must squeeze the rich, not the middle, to pay for a tax cut for the low paid. The LibDems say: ’Once you’ve lived here for seven years, you pay full British tax on all your worldwide income…..like the rest of us.”
David Cameron yesterday said he would like to see tax cuts but that it is not possible when the UK is borrowing 11 per cent of GDP.