‘Rachel from accounts’ is tinkering with the national piggy bank under the guise of ‘everyone should pay their taxes’ but as usual it is having the opposite effect.

In her maiden Budget, she ploughed ahead with Labour’s promise to abolish the non-dom status that enables wealthy foreigners to live in the UK without paying tax on their overseas assets and income.

In its place, she confirmed the introduction of a residence-based scheme, which will provide incentives to investors and wealthy foreigners to come to the UK temporarily, which should come into effect in April this year.

But on the other hand, global analytics firm New World Wealth found that the UK lost 10,800 millionaires last year, a figure which, according to the Adam Smith Institute, would have cost the Treasury the equivalent income tax take, of over half a million average taxpayers.

A national newspaper reported that “she’s under pressure to reconsider a wealth tax on Britain’s richest households amid a growing public spending crisis”.

Under pressure

It’s going to be imposed on those worth £10m or more, which these days by the looks of things, won’t even buy you Elon Musk’s garden shed. And, if this trend continues, the net cost to HM Treasury will be humungous.

The Taxpayers’ Alliance have crunched the numbers thus:

• In 2024–25, the top 1% of income taxpayers earned 13.3% of total income and paid 28.2% of income tax. This is up from 22.7% in 2005–06.
• 35.6% per cent of the adult population paid no income tax at all in 2023–24.

So Reeves somehow didn’t realise that there is nothing more mobile than a non-dom running from an unwelcoming tax regime.

It appears that the Chancellor needed a blood-sacrifice to appease the left on the Labour party which effectively means that political dogma has superseded pragmatism.

But ‘making the rich poorer is never going to make the poor richer – something we know from failed socialist countries.

Let’s face it, the changes to the fiscal regime relating to non-doms will cost the Exchequer plenty in lost revenue from Stamp Duty, VAT and PAYE, as well as their flamboyant spending habits, which keep many in employment.

This is at odds with statements made by the Labour politicians before the election, that they were going to use the monies raised from this absurd tax proposal to pay for more doctors and nurses.

I wonder if the electorate will still support the Labour Party if it costs the taxpayers money to implement this daft non-dom scheme?

If it was additional revenue that they needed, it would have been a better idea to raise the non-dom fee from circa £90,000 to £200,000 or more per annum, in a similar vein to other European countries such as Italy, Portugal, Spain and France, who are welcoming these wealth creators with gusto.

This extra revenue would have brought in billions of pounds even if the taxpayers clutches could not get hold of the worldwide wealth of these non-doms.

The non-dom community are very politically and fiscally savvy and rather than be ‘sitting ducks’ in the UK they are leaving with their wealth on their private jets quicker than you can say ‘Gulfstream V’.  Lest we forget, ‘confidence arrives by foot but leaves by horse’.