Don’t kill the non-dom “golden goose” with tax, warns Tory MP
The government shouldn’t hit wealthy “non-dom” UK residents too hard with tax otherwise they could move elsewhere and deprive the economy of extra investment and talent, warned a Tory MP.
Jacob-Rees Mogg MP said last night that Britain’s tax regime needed to remain welcoming in order to keep top businessmen in the capital.
“We need to be very careful about the taxation of non-doms. We don’t want to kill the golden goose. One of the great attractions for foreigners coming to the UK is actually it’s a tax haven for foreigners, and that’s great.
“It’s rather irritating if you’re a UK taxpayer because you have to pay it all and the people who come in have very favourable terms. That is part of the reason that they’d be willing to come here and spend a lot of money. If we want the expertise in the City, we need to make it welcoming.”
Rees-Mogg was speaking to business leaders at a debate hosted by Politeia at the City of London’s Guildhall. He was speaking alongside the economist Dr Gerard Lyons, Lord John McFall and legal partner Scott Cochrane.
A “non-dom” refers to a British citizen who has interests abroad, so he/she does not have to pay tax on those offshore earnings. Chancellor George Osborne has pushed for a levy on non-doms, increasing it from a £30,000 annual levy to £50,000 floated the idea of a levy on non-doms.
Rees-Mogg offered thanks to the audience for their tax contributions that “subsidised the rest of the country”.
“Thank you very much for the tax revenues you provide that subsidizes the whole of the country, that is a huge contribution to the United Kingdom as a whole and a crucial benefit of a strong City,” he said.
The Tory MP railed against immigration restrictions that make it “absurdly difficult” for the City to continue to attract the best talent from overseas. Rees-Mogg, who set up and is still director of Somerset Capital Management, said:
“We need to be welcoming the expertise that we need in the City to make the City work. We make it absurdly difficult to get good people in here. They have to fill in endless forms, they may have to go to Croydon!”
Rees-Mogg pointed to the example of incoming Bank of England Governor Mark Carney, a Canadian, to show the flaws of Britain’s “mad” immigration system.
“We are so self-righteous that we poach a governor of the Bank of England from Canada and say it’d be quite wrong to give him expedited citizenship or residency or anything like that, he has to do it in the same way as anyone else. This is mad! We ask this man to come, we think he is the greatest central banker since sliced bread and he’s still having toe queue up to get into the country. What can we be thinking about?”
The Tory MP called for Britain to set its trading focus on emerging markets rather than the European Union, which he dismissed as a “sclerotic, inward-looking protectionist trading bloc” as well as “intrusive and statist”.
“We shouldn’t be moving away from the past that Europe represents towards the future that is the emerging markets,” he said.