Has non-dom gone on for too long?

It’s part of the British psyche to moan about the amount we pay in taxes. But when we crunch our own tax payment numbers, most of us have that moan, then pay up and move on with life. Most of us though don’t count our earnings in millions or have tax advisors to tell us how best to avoid paying the maximum amount in tax.

Although they sound slightly shady to those not in the financial know, there’s nothing illegal about non-dom status or tax havens. The problem for many though is that at a time when the government is imposing the heaviest tax burden on British families since the 1940’s, the super-rich appear to be somehow getting away with not paying their full and fair share. Non-dom (or non-domicile) status, though controversial, has been around for centuries and allows certain wealthy individuals to avoid paying UK tax on their overseas income. A nom-dom is a UK resident who declares their permanent home to be outside of the UK.

Sounds a little dodgy, doesn’t it? But surely it can’t be, because the Chancellor’s wife, Akshata Murty, has until very recently been using her non-dom status to lower her UK tax burden, while other documents suggest that husband Rishi Sunak was listed as a beneficiary of trusts held in tax havens. A tax haven, by the way, is a country that offers businesses or individuals minimal or no tax liability on their deposits or investments. It can save millions for the multi-millionaires.

Health Secretary Sajid Javid had non-dom status before he entered politics and did not pay UK tax on his overseas income for six years when he was a banker earning up to £3m a year. He also benefited from an offshore trust while he worked for Deutsche Bank 20 years ago. In fact, only five of the government’s 22-strong Cabinet have confirmed that they and their families do not benefit from the use of tax havens or non-dom status.

Some Cabinet ministers have, however, been clear in confirming that they do not use tax havens to minimise their tax bills. But this is a situation that extends far beyond wealthy politicians. For years mega-rich foreign individuals, businessmen such as former TV show Dragon’s Den investor James Caan, and Russian oligarchs like Chelsea football club owner – but not for much longer – Roman Abramovich, have been encouraged to live in the UK while claiming non-dom status.

With Russia’s invasion of Ukraine, many of those oligarchs living here have swiftly departed and their assets have been frozen. So now could perhaps be an appropriate time for Parliament to take a fresh look at the non-dom status issue, and while they’re at it they might take in the tax havens too. Such a move would likely be unpopular with the super-rich and certain others, as many make mega donations to politicians and political parties. But it could just find favour with the electorate.