In the apocryphal words of Euripides, “whom the gods would destroy, they first make mad”. If the old adage is true, then some dastardly deity must have set their sights on destroying Britain — only a mad nation would work so hard to attract low-skilled migration while making life so difficult for the world’s best and brightest. 

For a perfect case in point, look no further than the British political establishment’s misplaced obsession with ending the non-dom tax regime. While governments of both parties loosen our migration rules, making it easier than ever for millions of people to move to the UK, they are also busily engaged in pushing away some of our most productive residents. As of the last budget, there is now a cross-party consensus on ending the legal regime which brings thousands of successful individuals to the UK, at almost no cost to the taxpayer.

Despite the political establishment’s outsized interest in driving away non-doms, few seem to be able to articulate what non-dom status actually means. Put simply, non-dom — short for non-domiciled — describes a UK resident whose primary home, for tax purposes, is outside the UK. A non-dom only pays UK tax on the money that they earn here in the UK, though they do not have to pay tax to the UK government on money that they make elsewhere in the world. Non-doms also pay a steep fee — either £30,000 or £60,000 depending on individual circumstances — to continue benefiting from the status. 

And according to HMRC, around 80,000 people in the UK are registered as non-doms — but between them, this group paid more than £6 billion in UK tax in 2022. That’s not to mention the additional capital that non-doms spend, invest, and save here in the UK. At its face, a reasonable proposition — a small number of high net-worth individuals can reside in the UK, while paying tax only on their UK income. In turn, during the course of their residency, they help to stimulate our economy by spending and investing here, while making an outsized contribution to the public purse. 

Back in April 2022, Labour revealed its plans to scrap the non-dom tax regime — seemingly motivated by little more than a desire to raise some quick cash. Yet it was Conservative chancellor Jeremy Hunt who announced that non-dom status would be phased out, in March 2024. By April 2025, the non-dom regime will be phased out entirely. 

… our treatment of non-doms is totally nonsensical when considered against the backdrop of our broader migration policy

For Britain, this represents an enormous opportunity cost. Already, high net-worth individuals are setting up shop elsewhere, preferring Portugal, Dubai, and Greece to high-tax Britain. In practical terms, that means less income for British businesses — unsurprisingly, non-doms typically have cash to spare — and less investment here in the UK. It could also mean less money for the Treasury; if non-doms are currently contributing £6 billion to the Treasury, an exodus could mean that the policy costs the Government more money than it actually raises. 

And what’s more, our treatment of non-doms is totally nonsensical when considered against the backdrop of our broader migration policy. The vitriol directed at non-doms by many mainstream commentators is a perfect example of Britain’s two-tier approach to human capital. In recent years, we’ve made it easier and easier for low-skilled labour to come to this country, while making life more difficult for high-flying high-earners to set up shop here. While many universities open up London campuses designed to dish out so-called “Deliveroo Visas”, governments of both parties seem intent on driving away high net worth individuals who see Britain as a great place to live, work, and invest. Whether it’s ending the VAT-free shopping ban, hiking taxes, or ending the non-dom status, Britain is sending a simple signal to the world’s wealthy: you are not wanted here.

High net-worth individuals tend to be high agency; by definition, non-doms already have homes elsewhere, and many will simply choose to leave the UK, taking their investments with them. In fact, in many cases, they already are — Britain is now losing more millionaires per year than any other country, besides China. 

To those on the left who say “good riddance”, consider that the millionaire exodus from the UK doesn’t mean fewer millionaires in the world — it just means less investment in the UK and less money for the public purse. In turn, that means fewer jobs created, and less money to spend on public services. There is a deep intellectual inconsistency in extolling the value of low-end migration while pushing away high-quality, low-impact non-doms. If Chancellor Rachel Reeves wants to demonstrate her commitment to economic reality over ideology, she should reverse her position on non-dom status at the next budget — regardless of the inevitable crowing from the backbenches. 

For decades now, governments across the world have sought to attract high-quality human capital. Lee Kuan Yew, Singapore’s visionary founding father, understood that the basis of the Lion City’s success was its ability to attract the highest quality talent — and yet two-tier Britain seems intent on driving away some of our most talented, enterprising, and deep-pocketed residents in a fit of misplaced egalitarianism. Rather than punishing non-doms, we should be celebrating this element of our tax regime as a rare competitive advantage over our international peers. Our approach to international talent should be driven by a simple principle — quality over quantity.