Amid fanfare, Rachel Reeves, the UK's shadow chancellor, this week promised that Labour will abolish the non-dom tax scheme that allows wealthy folk to live in the UK and not pay tax on their overseas income.
It is, of course, the ruse that Rishi Sunak’s wife used to save a tax bill of £20 million. Reeves explained it “simply isn’t right that those at the top can benefit from outdated non-dom tax perks while ordinary people struggle with tax rises and the cost-of-living crisis”.
Labour, she declared, was sending “a clear message” to the global super-rich: “If you make your home in Britain you should pay tax here — on all of your income.”
Anyone might suppose this is new. But the then Labour leader, Ed Miliband, in a speech at Warwick University, during the 2015 general election campaign, similarly attacked the non-dom rule, which is unique to the UK, saying it was born of a belief that “anything goes for those at the top and that what is good for the rich is always good for Britain”.
“There are people who live here in Britain like you and me, work here in Britain like you and me, are permanently settled here in Britain like you and me, but aren’t required to pay taxes like you and me because they take advantage of what has become an increasingly arcane 200-year-old loophole,” Miliband said.
“There are now 116,000 non-doms, costing hundreds of millions of pounds to our country. It can no longer be justified, and it makes Britain an offshore tax haven for a few.”
Non-doms, or to give them their full title, non-domiciles, pay UK income tax and capital gains tax on their UK income and gains, and whatever income generated overseas they choose to remit to the UK.
In comparison, UK domiciles must pay tax on all their income and gains, wherever in the world they originate — Britain or overseas.
It’s a system that is wide open to abuse. Those who have lived abroad and return to the UK can claim they in effect do not belong, they’re a non-dom, simply because they own a burial plot abroad, a foreign bank account, or their father was born overseas. Even a subscription to a foreign newspaper is enough to show their allegiance lies elsewhere and gain the coveted exemption.
Former HSBC chief executive Stuart Gulliver was revealed in 2015 as being able to claim he was a non-dom because he previously worked in Hong Kong, even though he was born and raised in Britain, had worked in the UK for the past 12 years and sent his children to school in the UK.
Faced with cases like his, the Tories increased the annual fees on those who are granted non-dom entitlement. This was not enough for Labour, which said it would go further and scrap the privilege entirely.
Suddenly, in the white heat of the election battle, the Tories were exposed as the party that favoured the wealthy over ordinary people.
Then, a tape turned up of Ed Balls, shadow chancellor at the time, saying: “If you abolish the whole status it will end up costing Britain money because some people will leave the country.”
Labour’s policy did not look so black-and-white after all; the Tories could relax.
Indeed, back then, Labour stressed that foreigners in the UK for a temporary short period would be able to claim they were non-dom.
Cut to Reeves this week. Having pledged Labour would end non-dom status — introduced under King George III in 1799 when Britain was fighting France — she said it would be replaced by a modern scheme for people who are “genuinely living in the UK for short periods to allow us to continue to attract top international talent”. So not quite abolished after all, then.
Where enticing overseas investors in a crowded international marketplace is concerned, saying is one thing, doing it is quite another.
The problem is that the logic of an inducement to people who might live, invest and create jobs in the UK is hard to fault. The difficulty is that what should amount to a few thousand genuine cases at most now comes in at more than 100,000. That’s exploitative and should be ended. But where does the fault lie? As Miliband stated: “I don’t blame people for taking advantage of non-dom status. I blame governments for fostering a system that can be taken advantage of.”
Yes, but what is the alternative? Labour said it would consult widely on how its new “temporary resident tax regime” would work but that any tax advantages would be likely to expire after five years, compared with up to 15 years under the current system.
In other words, as with Miliband and Balls, scrapping the benefit sounds good on paper, attracts the right headlines and is broadly appealing, but someone with an eye on the financial implications — and this in a fierce globally competitive environment, don’t forget, in which all countries are seeking investors — has a word in the ear to point out there is a practical downside.
Labour will make huge claims about being the party that stands for the little man, the one that terminated non-doms. But it’s also the one introducing the concept of temporary residents.
Where enticing overseas investors in a crowded international marketplace is concerned, saying is one thing, doing it is quite another.
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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AWARDS
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WandaVision
Starring: Elizabeth Olsen, Paul Bettany
Directed by: Matt Shakman
Rating: Four stars
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
What is graphene?
Graphene is extracted from graphite and is made up of pure carbon.
It is 200 times more resistant than steel and five times lighter than aluminum.
It conducts electricity better than any other material at room temperature.
It is thought that graphene could boost the useful life of batteries by 10 per cent.
Graphene can also detect cancer cells in the early stages of the disease.
The material was first discovered when Andre Geim and Konstantin Novoselov were 'playing' with graphite at the University of Manchester in 2004.
Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
UAE SQUAD
UAE team
1. Chris Jones-Griffiths 2. Gio Fourie 3. Craig Nutt 4. Daniel Perry 5. Isaac Porter 6. Matt Mills 7. Hamish Anderson 8. Jaen Botes 9. Barry Dwyer 10. Luke Stevenson (captain) 11. Sean Carey 12. Andrew Powell 13. Saki Naisau 14. Thinus Steyn 15. Matt Richards
Replacements
16. Lukas Waddington 17. Murray Reason 18. Ahmed Moosa 19. Stephen Ferguson 20. Sean Stevens 21. Ed Armitage 22. Kini Natuna 23. Majid Al Balooshi
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A cheaper choice
Vanuatu: $130,000
Why on earth pick Vanuatu? Easy. The South Pacific country has no income tax, wealth tax, capital gains or inheritance tax. And in 2015, when it was hit by Cyclone Pam, it signed an agreement with the EU that gave it some serious passport power.
Cost: A minimum investment of $130,000 for a family of up to four, plus $25,000 in fees.
Criteria: Applicants must have a minimum net worth of $250,000. The process take six to eight weeks, after which the investor must travel to Vanuatu or Hong Kong to take the oath of allegiance. Citizenship and passport are normally provided on the same day.
Benefits: No tax, no restrictions on dual citizenship, no requirement to visit or reside to retain a passport. Visa-free access to 129 countries.
Coal Black Mornings
Brett Anderson
Little Brown Book Group
The biog
Age: 59
From: Giza Governorate, Egypt
Family: A daughter, two sons and wife
Favourite tree: Ghaf
Runner up favourite tree: Frankincense
Favourite place on Sir Bani Yas Island: “I love all of Sir Bani Yas. Every spot of Sir Bani Yas, I love it.”
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Zimbabwe v UAE, ODI series
All matches at the Harare Sports Club:
1st ODI, Wednesday, April 10
2nd ODI, Friday, April 12
3rd ODI, Sunday, April 14
4th ODI, Tuesday, April 16
UAE squad: Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Mohammed Usman, CP Rizwan, Chirag Suri, Mohammed Boota, Ghulam Shabber, Sultan Ahmed, Imran Haider, Amir Hayat, Zahoor Khan, Qadeer Ahmed
UAE currency: the story behind the money in your pockets
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UAE currency: the story behind the money in your pockets
What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
- Grade 4 = grade C
- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
The years Ramadan fell in May
LIVING IN...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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Company Profile:
Name: The Protein Bakeshop
Date of start: 2013
Founders: Rashi Chowdhary and Saad Umerani
Based: Dubai
Size, number of employees: 12
Funding/investors: $400,000 (2018)
THE SPECS
Engine: 1.5-litre, four-cylinder turbo
Transmission: seven-speed dual clutch automatic
Power: 169bhp
Torque: 250Nm
Price: Dh54,500
On sale: now
New UK refugee system
- A new “core protection” for refugees moving from permanent to a more basic, temporary protection
- Shortened leave to remain - refugees will receive 30 months instead of five years
- A longer path to settlement with no indefinite settled status until a refugee has spent 20 years in Britain
- To encourage refugees to integrate the government will encourage them to out of the core protection route wherever possible.
- Under core protection there will be no automatic right to family reunion
- Refugees will have a reduced right to public funds
The bio
His favourite book - 1984 by George Orwell
His favourite quote - 'If you think education is expensive, try ignorance' by Derek Bok, Former President of Harvard
Favourite place to travel to - Peloponnese, Southern Greece
Favourite movie - The Last Emperor
Favourite personality from history - Alexander the Great
Role Model - My father, Yiannis Davos
The specs
Engine: 3.5-litre twin-turbo V6
Power: 380hp at 5,800rpm
Torque: 530Nm at 1,300-4,500rpm
Transmission: Eight-speed auto
Price: From Dh299,000 ($81,415)
On sale: Now
