Labour leader Ed Miliband is seeking to return tax avoidance and non-dom rules to the spotlight just days before the election.
Speaking today in Pendle, Lancashire, Miliband will claim that “there is no bigger symbol” of the failures of the coalition Government than tax avoidance, and renew his pledge to ban non-dom status for those resident in the UK long-term.
“The tax gap between the amount owed and the amount collected has gone up to £34bn under this government,” Miliband will say.
“The scandal at HSBC has been brought to the heart of Government, the hedge funds are given the green light to avoid paying their fair share. It’s one law for a few, another law for everybody else.
“This means higher taxes for working people and businesses, as well as starving money from our public services. Let me be clear: Any government I lead after this election will abolish the non-dom rule.
“The next Labour government will do what no government has done for 200 years. We will replace the non-dom rule with a clear principle: anyone permanently resident in the UK will pay tax in the same way.”
Current rules allow individuals whose tax domicile is outside of the UK to pay an annual remittance charge of up to £90,000 to sidestep taxes on foreign income or gains.
The size of the charge is dictated by the length of time the individual has been resident in the UK.
Under Labour’s changes individuals would be blocked from claiming non-dom status after a short period in the UK, although this length of time has yet to be defined.
However, the proposals have already proved controversial, with the Centre for Economics and Business Research describing the policy as “misguided”.
Liberal Democrats have also hit out at the plans, pledging instead to raise remittance charges, while the Conservatives have promised a broader crackdown on avoidance and evasion.