FT: Abolishing non-dom tax could see UK economy shrink by £6bn … economically and taxwise a total flop

The FT is citing financial scientific researchers: “When a non-dom leaves, taking their investments and businesses with them, the UK loses out.

With productivity stalling and GDP per capita growth stagnant since 2007, maximising capital investment should be a key pillar of the UK’s rebuilding efforts – but chasing away non-doms will only harm our long-term economic prospects.”

According to the report, annual losses are projected at £500mn in investment and £3bn in capital stock. This is the possible impact of the departure of just 5,795 non doms out of 22,100.

Up to the year ending 2023, non-doms contributed £6.2bn in direct tax revenue deriving from 83,000 individuals, the report revealed.”

Further the FT writes:” the UK is expected to lose 9,500 millionaires by the end of 2024, with millionaires per capita potentially decreasing by 20 per cent by 2028. ” The FT summarizes the report: “5,800 taxpayers’ consumption contributes around £1.5bn to GDP a year which would be foregone if they migrated. This could lead to more than 23,000 job losses from foregone consumption in addition to the lost revenues from VAT. These are concentrated in the transport, recreation and culture and hospitality industries.”

This was the 2024 estimate.

In 2024, 10’800 millionaires have left the UK. In 2023, ca. 4’000 millionaires left. This is one millionaire leaving every 45 minutes and with him his money, his UK investments, and his formidable lifestyle spending etc etc. Usually, non-doms are employers, high level consumers, charity sponsors, big investors.

All this is lost for the UK. A negative annual return of £1 billion is expected at least. The property market is in a downturn, high end properties are up for sale but no buyers can be found. The industry catering for such high end properties is on the losing edge. A notable property firm has closed its country house offices as the market is dead.

London’s lights will not go off so fast but shops and restaurants have experienced less customers and less sales compared to the non-dom years before.

The abolition of the non-dom status was wrong for the UK. It may lead to a fairer taxation for all but it also leads to less tax revenues and eventually to higher taxes for all. The UK became fairer, but poorer.