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Second, it is curious that his top end estimate at around £4 bn is remarkably similar to my own, admittedly now out of date estimate.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
27 Responses to “How much will the change in the domicile rule raise in tax?”
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!
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.
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*…
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.
Guest
“U MUST HAVE MY LIFE”
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.