Shocking new figures have shone a light on the impact of Chancellor Rachel Reeves's controversial clampdown on high earning "non-dom" individuals on the wider UK economy.
As unveiled in her 2024 Autumn Budget, Reeves scrapped non-domiciled tax status, which previously allowed rich individuals with connections to foreign countries to avoid paying full tax on earnings made overseas.
Since its implementation, the change to HM Revenue and Customs (HMRC) has been criticised for reportedly contributing to an exodus of high net worth individuals from Britian.
Despite these reports, early monthly payroll data from HMRC suggests the number of non-dom departures from the UK is aligned with official predictions from the Government's financial watchdog.
The impact of Rachel Reeves's non-dom tax changes have been revealed
|GETTY
In January, the Office for Budget Responsibility (OBR) estimated that 25 per cent non-doms with trusts would flee the country in response to the change in their tax status.
Furthermore, the OBR predicted that 10 per cent of non-domiciled individuals without trusts in their name would also leave the country after the Reeves's changes were enforced.
It is understood that official data is aligned with these earlier estimates, according to people briefed on the findings who told The Financial Times.
Notably, some individuals briefed on the HMRC data suggested the number of non-doms leaving the UK has come in less than the OBR's previous projections in a win for the Chancellor.
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Rachel Reeves has been under fire
| PAIn 2023, former Conservative Chancellor Jeremy Hunt confirmed plans to phase out non-dom tax status which would have seen high earners slapped with a flat annual charge.
Non-dom individuals living in Britain earn a regular income from either work or pensions, which would see them register as a taxpayer under PAYE (pay as you earn) figures.
Any drop in PAYE figures since the introduction of the tax change would suggest that wealthier people were leaving the country in reaction to Labour's tax raid.
It should be noted that this data does not include the movements of high earners who do not work in Britain, which are likely to include some of the richest in the country.
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Economists cite payroll data as being a useful indicator of potential non-dom movement as over120 days have passed since the start of the tax year, which started on April 6.
As such, experts believe it is likely anyone who did not want to be registered as a UK tax resident would have moved abroad.
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Non-doms have been targeted in a HMRC raid
| GETTYAccording to HMRC, there will not be any official data on how many non-doms who have earned UK income have left until January 2027, as the taxpayers will have had to have filed their Self-Assessment returns for the previous year.
A Government spokesperson said: “If you make your home in Britain, then you should pay your taxes here too. That is why we abolished the non-dom tax status to invest in our public services, including the NHS.
"But the UK remains a highly attractive place to live and invest.
"Our main capital gains tax rate is lower than any other G7 European country and our new residence-based regime is simpler and more attractive than the previous one, whilst it also addresses tax system unfairness so every long-term resident pays their taxes here."