Glancing at your graph of tax paid by non-domiciled taxpayers living in Britain (“City of London could bear the brunt of ‘non-dom’ tax reforms”, Lex, April 10), one can see that even in nominal terms the tax take has fallen over the 10-year period, at a time when government tax receipts increased 66 per cent — to record highs.
In inflation-adjusted terms, since the war on non-doms began, the relative tax take has fallen by more than 40 per cent. A huge drop.
That drop in UK revenues excludes the significant spending and investment of these people and their staff who have now fled elsewhere. It also does not adjust for Americans for whom non-dom rules are irrelevant due to US tax rules. Both of these imply UK losses to be even more significant.
Even more glaring is the obvious nonsensical government forecast that £3bn more in tax will be raised, some 40 per cent more than is currently raised, by making the rules worse for non-doms. Perhaps the tax take will drop another 40 per cent, but the idea that it will rise goes against all the evidence of the past 10 years. Taking a reality check, the “forecast” is saying that 5,500 people are each going to voluntarily pay additional tax of £545,000! Really?
It is obvious that making tax rates higher for people who are mobile will drive them, their spending and their investment away from Britain, as it has been doing since politicians naively started tinkering.
James Woolf
London SW3, UK
