The UK government may lose significant tax revenue, if his proposed new rules for nonresidents prompt too many rich people to leave the country, warns the international law firm Pinsent.
According to Pinsent, British residents contributed GBP6.57bn (USD8.67bn) income tax in 2014-15, respectively. He explained that this figure is an average of GBP56,589 for the year, compared with an average of GBP5,152 per person in the general population.
Expert tax investigation Fiona Fernie said: “Non-residents made a very valuable contribution to the UK economy and any significant outcome could have serious long-term consequences of this policy.”
Under the current rules, non-residents pay tax on income and profit outside the UK only if they transferred funds in the UK using tax base. Non-residents must pay an additional fee for money transfer Charge (RBC), or pay the full amount of tax in the UK to be covered by the resident.
This measure would be effective for most purposes of income tax and GCT after 6 April 2017.
“The presence of non-resident status gives the UK real competitive advantage when it comes to attracting the rich and talented people. Uninstall or change it now, especially in light of the uncertainty generated Brexit, will cause many serious look at moving,” warned Fernie.