Non-Dom Tax Gamble threatens to cost Reeves billions

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Chancellor Rachel Reeves’s ambitious reforms targeting the UK’s non-domiciled residents risk backfiring, with new economic analysis suggesting they could ultimately cost the Treasury billions of pounds in lost revenue. Rather than boosting public finances, the move to scrap non-dom status may trigger a wave of wealthy departures, reducing overall tax income and jeopardising the government’s fiscal projections.

 

According to the Centre for Economics and Business Research (CEBR), if half of the UK’s non-doms leave in response to the reforms, the Exchequer could lose up to £12.2 billion over the current parliamentary term. Even a more modest exodus of one third could cost the country £700 million in the first year alone. And if just 25 percent of former non-domiciled individuals choose to relocate, the Treasury would see no financial benefit from the policy at all.

 

“There are already signs that non-doms are quitting the UK,” the CEBR warned. Last year, more than 10,800 millionaires left Britain—more than double the number who exited in 2023, according to figures from the Adam Smith Institute. The early months of 2025 have also seen a downturn in tax receipts from wealthy individuals, suggesting the financial impact is already underway.

 

High-profile names have begun to publicly signal their discontent with the policy shift. Lakshmi Mittal, the billionaire steel tycoon, is reportedly considering leaving the UK, while the Livingstone brothers, prominent property investors, have relocated to Monaco, according to Companies House records. Richard Gnodde, vice chairman of Goldman Sachs in Europe, has already made the move to Milan, where tax incentives for the rich remain intact.

 

The changes came into effect in April when the Treasury formally abolished the non-dom regime. Previously, this status allowed individuals living in the UK to avoid paying UK tax on their foreign income, provided their permanent home was registered abroad. The new system now requires long-term UK residents to pay taxes on worldwide income, aligning their obligations with those of full UK citizens.

 

Sam Miley, an economist at the CEBR, highlighted the stakes of the policy. “Our research highlights that the Treasury’s finances will be highly dependent upon the behaviour of former non-domiciled people. If a quarter of this group were to leave the UK in response to recent reforms, we predict that the Treasury will begin to make a loss,” he said. “This loss could escalate into the billions if a larger share left. For every non-dom deciding to relocate, the Treasury will not only lose the tax revenue from their income and gains, but also from their day-to-day activities, with non-doms typically being high spenders as well as high earners.”

 

The CEBR estimates that the best-case scenario—where no non-doms emigrate—could raise £2.5 billion for the Treasury in the first year. However, this figure falls far short of the £10.3 billion forecast by the Office for Budget Responsibility (OBR). Miley added, “We perceive the risk to the Treasury to be more significant than suggested by the OBR in its assessment of the reforms.”

 

Critics within the political sphere have also sounded alarms. Andrew Griffith, the shadow business secretary, said: “Investors and wealth creators leaving the UK for brighter shores is nothing short of disastrous for our economy. It also means we will all have to pay higher taxes to make up the shortfall. The Government must change course on its tax changes before even more damage is done.”

 

The Treasury, however, stood by its projections. A spokesperson responded, “We do not recognise these figures. The independent OBR has confirmed that the changes to the regime will raise £33.8bn over the next five years. Replacing the outdated non-dom tax regime with a new internationally competitive residence-based system addresses unfairness in our tax system, attracts the best talent and investment to the UK, and ensures everyone who is a long-term resident in the UK pays their taxes here.”

 

Related Topics:

British Billionaire Brothers Relocate to Monaco Amid UK Wealth Exodus

Rachel Reeves to Revise Non-Dom Tax Rules Amid Wealthy Exodus

 

  Adpated by ASEAN Now from The Telegraph  2025-05-08

 

 

[JonnyF]

Of course they will leave. Why wouldn't they? And they will take their vast wealth and spending habits with them.

 

I wouldn't really call it a gamble by Rachel from accounts. It's more like remortaging your house and putting 100% of the proceeds on Eddie The Eagle making a comeback and winning Gold at the 2026 Winter Olympics.

 

I'd call it insanity. Economic illiteracy. Financial suicide. Rachel's only skill appears to be faking her own CV. 

[Social Media]

@Watawattana don't bother leaving a comment if all you have is to make off topic deragorty name calling of the media outlet.

 

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[soalbundy]

Money is as shy as a deer at the forest's edge, one loud noise and its gone. Reeves appears to be only looking at numbers on a sheet of paper without using common sense, like asking herself 'If I was a multi millionaire and could avoid paying tax by changing countries what would I do'?

[shackleton]

If this keeps up people leaving the UK

Plus those coming to Thailand the land of smiles for a better living ☺️ 💰 🤑 

Those left will be those that can't  leave and illegal immigrants and asylum seekers 

What a depressing thought 😱

 

 

[Chomper Higgot]

Easily fixed.

 

Adopt the U.S. tax policy of taxing income on citizens regardless of location.

 

 

[Andycoops]

Clueless Rachel from accounts and the Kur Starmer are alienating just about everyone from the millionaires to the dustbin men.

 

They won't last long...

[BexMan]

Many experts warned her of the potential financial  consequences of her actions before she implemented the policy. She still chose to introduce them, so no surprise at the net result. The Pimlico Plumber moved to Marbella as soon as Labour got in because of their policies like this.

[rickudon]

These days, only Employees/salaried people pay significant amounts of income tax anyway. In this digital age, the profits just get skimmed off to some tax haven, laundered and paid out as foreign dividends.