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Every year HMRC publishes detailed information about the number of non-UK domiciled taxpayers (non-doms) in the UK and how much UK tax they pay in total. Given the amount of publicity that non-doms have had over recent months, and the cross-party move to abolish non-dom tax status, the publication of the latest figures provides a useful reality check.

The number of non-dom taxpayers

The first thing the figures tell us is how few non-doms there really are in the UK. Including both non-doms and ‘deemed’ doms (non-doms who have been UK resident for more than 15 years), there were 83,800 individuals resident in the UK in the 2022/23 tax year who met the definition. This represents an increase of around 5,000 people compared to the 2020/21 and 2021/22 tax years, when the coronavirus pandemic had an impact on where people lived, but remains around 5,000 below pre-pandemic levels.

Most strikingly, in 2021/22 only 500 people who had lived in the UK for more than 12 years chose to be taxed on the remittance basis, which means that they were only taxed on foreign income or gains if the resulting funds were brought to or used in the UK. This figure has been static since 2018 and suggests that there are very few non-doms in the UK who are wealthy enough to make it worth paying the higher-level annual remittance basis charge of £60,000. Despite being taxed on the remittance basis, these 500 individuals paid £285m in direct UK taxes, including the remittance basis charge, in the year between them – over £500,000 each. 

Casting the net wider, 1,900 non-doms who had been resident for between 7-12 years claimed the remittance basis and suffered the lower annual remittance charge of £30,000. These individuals also paid an average of over £500,000 each in tax in 2021/22, reinforcing the point that a small number of non-doms contribute a large amount to the exchequer under the existing rules.

The number of non-doms who have been UK resident for fewer than eight years and claim the remittance basis has fallen dramatically over the last few years – from 24,700 in 2016/17 to 15,700 in 2021/22. These short-term residents also pay much less tax – an average of just under £70,000 each in 2021/22.

Some thoughts

This article is not a plea for the retention of non-dom status – that ship has sailed. What the tax figures tell us though is that the UK raises a lot of tax each year from a small number of individuals who choose to make the UK their home. Even without taking account of the impact of their spending and investment in the UK, wealthy non-doms pay an average of over £500,000 UK tax a year. In many cases these individuals are internationally mobile and find it easy to move tax residence from one country to another. Italy, for example, offers a fixed €100,000 annual tax cost deal to qualifying individuals, and moving there could save some of these non-doms hundreds of thousands of pounds in annual taxes.

The latest non-dom figures show a long-term trend of overall numbers falling, and this should be a worry for UK PLC. If it is not attracting and retaining wealth and talent internationally, it will be harder for the UK to grow in the way the new government wants it to. Increasing tax liabilities on non-doms may be attractive politically, but changes need to be implemented intelligently, given the risk of wealthy families leaving the UK altogether, at the potential cost of millions in lost tax. 

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