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PBR: Darling calls for 7 and 10-year tax charges for non-doms

Alistair Darling has announced that he will consult on levying tax charges on
non-domiciled UK residents who have lived in the UK for seven years.

Darling said a higher rate would apply after 10 years of residence and he will work to prevent people from evading tax by disguising income as capital, falsely claiming they are out of the country or claiming two allowances.

Darling rebuffed Tory calls for a flat rate annual charge of £25,000 on 150,000 non-domicile taxpayers, which it was claimed could raise £3.5bn.

He said: “There are in fact only 115,000 registered non-domiciles. If the charge of £25,000 was imposed, only an estimated 15,000 would earn sufficient money abroad to make it worthwhile to maintain non-domicile status.

“As a result, the combined effect of people paying this charge or changing their tax status would be revenue not of £3.5bn, but £650m a year at most. A shortfall of more than £2bn.”

Darling added that charging a flat rate would discourage professional workers from coming to the UK in the short term.

He said: “…such a charge could discourage men and women – doctors and nurses, businessmen and women – from entering this country for short term work and who do pay tax on their earnings here and who do contribute to the country’s wealth. We don’t want to turn them away.”

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