UK non-doms paid record tax take of £12.4bn in 2022, says HMRC
While there was a drop in taxes in the previous tax year, the HMRC has some evidence of a recovery in the tax year ended 2022 among newly arrived non-domiciled taxpayers
In the tax year ending 2022, the HMRC estimated a combined total of at least 78,700 non-domiciled and deemed domiciled taxpayers in self assessment tax returns with combined total income tax, CGT and NI contributions of at least £12.4bn.
This amount spells an increase from 78,100 taxpayers and £11.3bn, respectively, in the previous tax year, marking the largest annual tax liability from this combined group since figures began in 2008.
While there was a drop in taxes in the previous tax year, the HMRC has some evidence of a recovery in the tax year ended 2022 among newly arrived non-domiciled taxpayers.
The increase in numbers may also be supported by some evidence of improved retention of existing non-domiciled taxpayers, compared with the previous tax year.
In addition, deemed domiciled taxpayers alone have UK tax liabilities of at least £3.9bn in the tax year ended 2022, and so are liable for at least 30% of the combined total for non-domiciled and deemed domiciled taxpayers.
However, the HMRC is “conscious” that not all deemed domiciled taxpayers need to indicate their status on their tax returns, so their liabilities are likely to be larger still.
Commenting on the figures, Lucy Woodward, partner at Saffery Champness, said: “The fact that the tax liabilities paid by UK non-doms reached a record high of £12.4bn in 2021-22, despite the non-dom population lingering well below pre-pandemic levels, demonstrates that the regime is by no means generous enough to neutralise the all-consuming effects of fiscal drag, but also what a potential money-spinner the non-dom status has the potential to be for the UK Treasury.
“Some may interpret record non-dom tax revenue as a justification to retain the regime on the grounds that to abolish or reform it beyond recognition might persuade the highly-internationally-mobile non-dom population to go elsewhere and take their taxable income and assets with them.”
She added: “One recent study estimated that abolishing the non-dom regime would net £3.6bn a year for the UK Treasury, but with non-doms currently paying almost four times that, it will be hard for some to shake the feeling that reform would be a roll of the dice from which the UK coffers might not stand to gain.”
