Regulation  

Election Papers: Labour to abolish non-dom tax perks

Election Papers: Labour to abolish non-dom tax perks

A ‘core vote’ election produces policies which play to the galleries on both sides simultaneously, with the headlines this morning (8 April) unveiling a Labour plan to attack non-dom tax perks.

According to articles in the Times and Telegraph, the Labour leader Ed Miliband is set to unveil a plan to scrap the tax relief offered to non-domiciled individuals, that is people who claim their permanent home is outside the UK.

Currently, non-doms only pay UK tax on money used, or ‘enjoyed’, in the UK, though they do have to pay an escalating fee of up to £90,000 to retain their status depending on how many years they have been ‘resident’ in the UK.

Non-doms also benefit from Business Investment Relief, a new tax break brought in by the coalition in 2012 to allow individuals to invest in UK businesses - and, controversially, UK property - without paying any UK tax.

The move is likely to play well with parts of the electorate which see the Tories as supporting the rich and who are dissatisfied with a recovery which appears riven with inequality.

However, it could do little damage to the core support of the Conservatives, who will see the policy as confirming Labour’s leftist agenda and anti-commercial instincts. It comes on the day another 30 business leaders signed a letter backing current economic policy.

Elsewhere, pressed by the Times chancellor George Osborne apparently refused to rule out including child benefit within the universal credit regime to help towards £12bn of pledged welfare savings.

The move would see the upper limit for child benefit reduced from a tapered restriction starting at £50,000 and ending at £60,000, to between £27,000 and £33,000 depending on the number of children in a family. It would save around £4.8bn, according to the Institute for Fiscal Studies.

Finally, in a debate in Scotland last night and broadcast on STV, Nicola Sturgeon hinted that she may still pursue a re-run of the independence vote, but that this would be an issue for the 2016 Holyrood elections rather than the upcoming general election.

ashley.wassall@ft.com