Ministers have been told to “come clean” on the economic argument behind not scrapping non-doms in the UK after the chancellor suggested he did not know how much money axing the controversial tax status would raise.
Jeremy Hunt insists the economy would not be helped by scrapping the status, saying on Friday that he would rather the super rich “stayed… and spent their money here”.
And he said he was told by Treasury officials that they were “very unsure” about how much money the move would actually make.
Labour has now called on ministers to publish figures on how many non-doms there are and the amount the Treasury loses because of the loophole.
The highly-respected Institute for Fiscal Studies (IFS) think tank told The Independent the “best estimate” it had was that abolishing the measure would be worth around £3 billion a year.
The figure is roughly the same amount as Mr Hunt announced will be added to next year’s NHS budget.
The Independent revealed earlier this year that Rishi Sunak’s wife, Akshata Murty, held non-domicile status while her husband was chancellor.
Mr Sunak called the reports about his wife “unpleasant smears” at the time, though she ultimately gave up the advantage.
The issue was seen as so toxic that insiders initially believed it scuppered Mr Sunak’s hopes of becoming prime minister.
The lawful status can save an individual from paying UK tax on income from dividends from foreign investments, rental payments on property overseas or bank interest.
Making the call for the government to produce figures on non-doms, shadow chief secretary to the Treasury Pat McFadden said: “As the Tories raise taxes on working people, it simply isn’t right that those at the top can benefit from outdated non-dom tax perks.
“If you make Britain your home you should pay your taxes here.”
He said Labour would ensure “people who make the UK their home will contribute to this country by paying tax on their global income”.
Labour also cited researched from the London School of Economics which alligned with the IFS and put the figure the treasury could raise as close to £3.2 billion a year.
Earlier this year, the IFS warned there was “very little evidence on the effectiveness of the non-dom regime at attracting and retaining valuable individuals”.
But Mr Hunt argued that scrapping the tax loophole as Labour has suggested would “damage the long-term attractiveness of the UK”.
He faced questions over his decision to keep the status while planning tax rises and public service cuts, which experts warned would hurt those on middle incomes especially.
The chancellor said Treasury officials did not give him solid numbers on how much abolishing or paring back non-dom status would raise.
“They said to me that they were very unsure about the figures that were being bandied around, as far as the savings were concerned,” he said.
