How much will the change in the domicile rule raise in tax?

This is not only a big step forward for tax and social justice but will give the Treasury a boost


My fellow left of centre tax professional blogger, Jolyon Maugham QC, has had a stab at estimating how much a change in the domicile rule will raise in tax for Labour, having firstly ignored and the annulled for behavioural changes. His blog is here and I recommend reading it in full. He concludes:

If I proceed from the above and stick a finger in the air – an exercise that you’ll have to take it from me is not so dissimilar to that which Treasury does when it forecasts the effects of tax measures – where do I get to in terms of yield? I’m not an economist – and the data is poor. But my instinct is that the stage one theoretical yield figures will tend towards the top end – towards the £4bn end – of the spectrum. But I also think 25 per cent is rather low as a behavioural effect: 50 per cent or even more might well be more realistic, depending on the detail of Labour’s measures. But that would still leave a yield well north of £1bn.

First, Jolyon is spot on about what the Treasury does.

Second, it is curious that his top end estimate at around £4 bn is remarkably similar to my own, admittedly now out of date estimate.

And third, after allowing for behavioural change we both estimate revenues of more than £1 billion.

Now, I am not saying that because Jolyon and I agree means we must be right, but we have not conferred on this issue and come to broadly the same answers. I think that is useful indication, at least. And neither of us believe that the behavioural changes will be of anything like the scale some will be claiming today. Indeed, they will be very far from it: I suspect remarkably few people will be leaving the UK as a result of this.

So without offering guarantees, I think we’re both saying that this is not only a big step forward for tax and social justice but will also give the Treasury a useful boost. No wonder it is on several newspaper front pages this morning.

Richard Murphy is the director of Tax Research UK

As you’re here, we have something to ask you. What we do here to deliver real news is more important than ever. But there’s a problem: we need readers like you to chip in to help us survive. We deliver progressive, independent media, that challenges the right’s hateful rhetoric. Together we can find the stories that get lost.

We’re not bankrolled by billionaire donors, but rely on readers chipping in whatever they can afford to protect our independence. What we do isn’t free, and we run on a shoestring. Can you help by chipping in as little as £1 a week to help us survive? Whatever you can donate, we’re so grateful - and we will ensure your money goes as far as possible to deliver hard-hitting news.

27 Responses to “How much will the change in the domicile rule raise in tax?”

  1. badders

    How much will it raise if the non-dome leave th UK for Switzerland etc? What will happen to their cleaners, waiters, drivers, gardeners etc?

  2. GTE

    What will happen is that non doms put their cash into companies. Then they will earn what they spend, if they draw it as income. If they spend capital, you get nothing. The result is bugger all tax.

    Non doms have already moved to the UK for tax reasons, and as economic refugees from kleptomaniac states that want to tax tax tax because they have massive debts.

    What makes you think they aren’t good at playing the game?

    Why do you think Branson has bailed out of the UK?

  3. robertcp

    I assume that the change will raise about £1 billion if many non-doms leave and about £4 billion if most of them stay. It will be unfortunate if their employees lose their jobs but presumably they would be looking for another job in any case. Somebody who leaves the country to avoid paying taxes is unlikely to be an enlightened employer!

  4. Cole

    A wonderfully Downton Abbey posting. Are you George Osborne?

  5. damon

    I’d just send them a huge tax bill and tell them to pay it or leave.
    It’s what they do in the States I believe, and many have left.

    There’s far too much dodgy money and people knocking about in London.
    And kids at universities and private schools who are from the corrupt elites of the third world.
    People like Said Gaddafi who went to the LSE.
    Why force British students to sit in class with people like that?

  6. Cole

    So what other countries have crazy rules like ours on non doms?

  7. David in Kent

    Like the 50% tax rate, this can be seen as a worthwhile measure even if it raises nothing or very little. There’s the payoff from pissing off fat cats to consider.

  8. David Lindsay

    George Osborne, who is the heir to an Irish baronetcy, is probably a non-dom.

  9. David Brede

    Guido Fawkes is already extolling the virtues of moving to Ireland so clearly the Tories don’t want to pay their fair share of tax.

  10. Leon Wolfeson

    Non-dom’s pay very little in tax. The entire reason they are here is we are a soft touch for them – low tax, and plenty of corporate welfare for them to get fat off.

    The reality is that your very rich pay very little tax in the first place, and the evidence from i.e. the Nordic states is that the don’t move their businesses. So very little indeed is lost if they take themselves off.

    Branson? He wanted a better climate. Oh, and a tax haven – the BVI are one of the many which the UK could end tomorrow, if the government had the basic decency to do so!

  11. Leon Wolfeson

    You mean the fact that they’d decamp and leave more for the rest of us? Bargain!

  12. Guest

    No, they do it legally in America, not your arbitrary bill. And I see, you’d ban all non-British students from University, closing at least 60 and devastating much of the remainder. No surprises there.

    Also, feel free to make it one less dodgy person in london.

  13. Leon Wolfeson

    Again, evidence from the nordics is that rich people don’t shut down their business when they personally leave.

  14. Leon Wolfeson

    Several hundred million. And not too many of those will be fired – they’ll just restrict their time spent in London, not close down their houses.

  15. damon

    I don’t care if universities need the money stolen from the populations of poor countries by their cruel and corrupt leaderships. It’s stolen and embezzled money and we are partly guilty of the crimes against those populations if we take it.

    We probably don’t ”need” it anyway. Any more than the English Premier league ”needs” to fleece fans so much for tickets to watch football.
    It could be done another way.
    I’d kick all the dodgy foreigners out. And Chelsea FC would have to find a new owner.
    And so what if Harrods went out of business? It could be turned into council flats for poorer people.

  16. Guest

    Oh yes, “stolen” cash by allowing foreign students, blah blah. Allowing movement of capital is to you “theft”, check.

    And of course you don’t think the UK needs a decent education system, and we can do it the other way of downskilling, as you kick everyone out who does not meet your criteria of being a True Brit.

    You’re talking about, in fact, siezing all foreign investments, making *sure* that the UK economy entirely collapses and we become a pariah nation. We then wouldn’t be able to afford football teams, and Harrods, like much of London, would have squatters in the ruins.

    Default and misery is where you’d *start* with that kind of policy – other countries navies patrolling for escapees like from Cuba, then, and…

  17. Faerieson

    As the election approaches we are again being bombarded with reasons not to venture down the road of greater democracy. ‘Business leaders are happy with the coalition,’ we are ‘informed,’ ‘vote accordingly.’ ‘Let’s not properly tax the non-domiciles,’ we have been warned, ‘they might take up their wealth and leave.’

    Perhaps we should just revert to the old feudal ways, and save the nation a fortune.

  18. David Lindsay

    I feel for the poor, confused Tories.

    On the one hand, they want to defend an arrangement unique to Britain that enables you to inherit a tax benefit, but only through your father, and even then only if he was married to your mother, with the benefit itself being useless unless you happened to be seriously loaded on an international scale.

    On the other hand, your father’s ancestor who first acquired that benefit has to have been an immigrant (originally, of all things, French), and the system has contributed to creating today’s London where part of the South of England used to be.

    It is a true dilemma for the Tories. A very true dilemma indeed.

  19. robertcp

    I think that we agree on this issue.

  20. damon

    The ruling elites in China are totally corrupt. Probably a majority of Chinese students at British universities have parents who are involved in that corruption.
    How else would they be able to afford it?

    One of the first articles I found when I googled for this subject.
    Meet The Chinese Luxury Shoppers Who Are Taking Over The World

  21. Guest

    Of course they are – they’re Capitalists.

    But then you accuse people of being evil because their parents hold the same ideology as you do. You’re rejecting them for being foreign and competition for you, no more – you’d have cheaper labour here if you can block them out,

    Kick out every last foreigner and block the borders, you say again. What does allowing trade, tourists, universities, a functioning economy etc. matter to the mere British peons!

  22. damon

    Spot the looney.
    I only say kick out all the super rich corrupt foreigners.
    I’ve got a chip on my shoulder, so what?
    Did you not hear me say that I welcome all other foreigners?
    The more the merrier.

  23. Guest

    Yes, it’s you, Demon.

    And right right, start with one set, then the next, then…as you talk about how your axe, which you’re swinging and have already hurt youself will, will make a nice pile of any other non-White Brit careless enough to trust you. The more *dead*…

  24. damon

    What a sad life you must have Leon.
    There I am, saying I’m OK with immigration and you’re insisting I’m not.
    I don’t actually care myself. The world will continue to evolve after I’m long gone.
    I just point out that overcrowding England has its consequences.
    Maybe you could attack me for liking the countryside and not liking too much new development that would turn all towns into conurbations.

  25. Guest


    You care deeply, it’s clear, and you launch into another attack on the Other. You of course utterly oppose house building and want to make higher prices off your slums, from your nice little country mansion.

  26. damon

    You must be about 15 Leon and feel chuffed that you’ve found an adult to follow around on different websites to annoy.
    I told you I work for under £10 an hour, which is less than average earnings, and don’t even own a house but have to rent.
    Pillock. Do you just want to ruin these comment spaces like this one, or on Spiked-online where you’ve been trolling me too?

  27. Guest


    Keep whining that other views exist, as you highlight one tiny part of your income, and talk about how your trust fund owns your houses.

    You keep screaming that allowing non-right posts “ruins” comment spaces, since you can’t post your propaganda unchallenged, as you complain that Jews posting is trolling.

    Then you claim to be an adult. Perhaps, but not a mature one.

Leave a Reply

You must be logged in to post a comment.