HM Revenue & Customs said the number of UK residents escaping tax on income or capital gains held in offshore bank accounts had declined from 139,000 to 123,000 in the year prior and after the launch of the £30,000 remittance basis charge in April 2008.
Say it isn\’t so!
About 5,400 people paid the £30,000 non-dom levy for the 2008/9 tax year, more than the 4,000 predicted by the Treasury prior to the tax’s introduction. This collected around £162m for the public purse, with £350m forecast for 2009/10.
In contrast, the Treasury estimated that non-doms pay around £4bn in income tax each year on top of the tax they pay on capital gains on UK assets, stamp duty and value added tax on spending, which brings the estimated total to £7bn.
And I think we might have spotted a Laffer Curve in the wild here.
We\’ve an 11.5% decline in the number of non-doms resident. Taking that £7 billion figure, reducing it by 11.5% we get a loss of £805 million.
We got £162 million from the new tax, lost £805 million on the old ones……a tax rise reduced revenue collected. Yup, that\’s the Laffer Curve alright.
So, err, why are we actually doing this?