New Times,
New Thinking.

  1. Politics
24 January 2025

Has Rachel Reeves given in to the non-doms?

Or is it just another win for the attention economy?

By Will Dunn

The news from Davos yesterday was that Rachel Reeves had been persuaded to “relax non-dom rules amid millionaires’ exodus” (Times). The Chancellor, it was reported, was planning to water down Labour’s longstanding pledge to tax overseas income after a report “found more than 10,000 millionaires left the UK in 2024” (BBC News).

The idea that the wealthy are deserting Labour’s Britain en masse has been credulously reported across the UK media, but it deserves scrutiny.

The 10,000 figure is not a government statistic, but a projection created by New World Wealth, a South African wealth intelligence firm, working with Henley and Partners, which sells residence and citizenship advice to wealthy people.

Anyone who read New World Wealth’s methodology would see that it compiled the data from “public sources… including LinkedIn and other business portals”. It would not be possible for any company to say if tens of thousands of people are non-doms, or where they are domiciled, or indeed how much money they actually have, because that information is private. So what the data actually says is that during 2024, a certain number of people who are thought to have been UK-resident millionaires changed their location on LinkedIn.

How many? I asked New World Wealth for the total number of people whom they recorded as having left the UK and was told: “We don’t give out that number as it will just confuse readers,” although the company did acknowledge that “the only people that will know the exact domiciles are HMRC”.

A person who does not work for the company but says they are familiar with the report told me that 140 people were recorded as having changed their location, and the total for the year was extrapolated from this. New World Wealth told me they didn’t recognise this figure.

I can understand why BBC News didn’t report the less dramatic “an unconfirmed number of people assumed to be millionaires have changed their location on LinkedIn”, but perhaps BBC Verify could pick it up for them. Call me a cynic, but I would suggest that when companies that sell migration services to millionaires claim that millionaire migration is the hot new trend, it might be worth checking that claim with another source.

Subscribe to The New Statesman today for only £1 per week

What academic research says about the UK’s non-dom millionaires is that most of them have jobs (very nicely paid jobs) in London, and if they leave, they would either stop having that job, or pay tax somewhere else. This is why departments such as Warwick University’s Centre for the Analysis of Taxation don’t expect a large proportion of London’s best-paid professionals to upend their lives to escape a country that already taxes them well below the OECD average.

Your time is too precious to spend on the details of the Temporary Repatriation Facility or the mixed fund ordering rules, but one important thing to understand about the old non-dom tax regime was that it wasn’t just unfair (because it allowed rich people to pay less tax), it was stupid, because it only gave rich people a tax break if they didn’t bring their money onshore. It gave the wealthy a tax break on overseas income, as long as they left their wealth somewhere else, which meant they refrained from spending it or investing it in the UK.

The details of the planned amendment to the Finance Bill haven’t been announced yet, but it sounds very much as if that’s the point – to increase the amount of wealth that rich people will want to bring into the country. Jeremy Hunt (who abolished the non-dom regime) would probably have done the same thing.

However, Rachel Reeves is going to have to get used to the fact that when she tells a room full of Davos Men that she has been “listening to the concerns that have been raised by the non-dom community”, one side of the press will crow that she’s scrambling to prevent the rich from deserting the country, while the other will grumble that she’s given in to the elite. It’s another win for the attention economy, which ensures that “current Chancellor proposes minor change to tax policy set by previous chancellor” is not the story.

This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here

[See also: Joe Powell: “Foreign wealth hollows out the community”]

Content from our partners
The future of exams
Skills are the key to economic growth
Skills Transition is investing in UK skills and jobs

Topics in this article : , ,