'It’s a basic principle that if you make Britain your home, you should be paying your taxes here'

The Labour Party has announced its plans to abolish non-dom taxpayer status, following the row over chancellor Rishi Sunak’s wife, who had opted out of paying income tax on cash earned overseas by claiming to be a non-dom, even as Sunak hiked taxes on working people.

Unveiling the policy pledge this morning, shadow chancellor Rachel Reeves said that it would instead bring in a shorter-term scheme for temporary residents.

Reeves told BBC Breakfast: “It’s a basic principle that if you make Britain your home, you should be paying your taxes here and by abolishing the non-dom status, that is exactly what we would achieve.”

Reeves added: “At a time when ordinary working people and the businesses who employ them are seeing their taxes, especially national insurance go up, it is right that we close some of the loopholes that mean a privileged few can get out of paying their fair share of tax.”

The Labour Party also says that scrapping the non-dom scheme could lead to a £1bn boost to the treasury’s coffers, according to research by the EU Tax Observatory.

It comes after it was revealed earlier this month that Rishi Sunak’s wife, Akshata Murthy, had saved millions of pounds in tax on dividends collected from her family’s IT business empire.

Non-dom status is an optional status for UK residents whose permanent home – or “domicile” – is abroad. With such a status people may not have to pay tax on foreign income.

The Labour Party has also said that it will crack down on offshore trusts as well as tax havens which are used to avoid paying tax in the UK.

Basit Mahmood is editor of Left Foot Forward

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