Not just non-doms: Wealthy workers considering leaving the UK to beat tax hikes
With the mass exodus of non-doms leaving the UK following a political crackdown, a lawyer has warned this feeling is spreading among many wealthy residents considering a switch to save on tax.
Non-doms have lit up the headlines over the last six months after Chancellor Rachel Reeves went ahead with her pledge to remove tax exemptions from mega-rich non-domiciled individuals.
Just weeks ago, City PM revealed that Goldman Sachs International’s boss was among those leaving the UK, and he opted to relocate to Milan.
However, with the rise of coverage on this matter, partner Michael Anderson of Joseph Hage Aaronson & Bremen (JHAB) told City PM that high-earning individuals are now considering moving out of the UK.
“I act for some clients that are not non-doms and are leaving the UK,” he said.
Anderson added that he would be “very surprised” if many high-earning bankers had not considered leaving the UK, even for a year or two, to save on tax.
Despite being several weeks into the new tax year, he explained he is getting inquiries from people asking if there is still time for them to go offshore this year.
“This is across the board…the amount of work there has been in advising people about the residence tests and their options have been absolutely unprecedented,” Anderson stated.
Eyes out for the tax agency
This activity focused on people relocating to become non-residents, and the high-ranking lawyer warned that HMRC would scrutinise the details.
One of the areas he predicts where HMRC will attack in due course is looking at whether or not people have really followed the rules of the statutory residence test.
He explained several rules, including the number of days you can return to the UK and the number of hours you have to work abroad, which, as he highlighted, can be difficult to keep track of certain jobs.
Anderson warned that when HMRC sends its inquiry, people will need to be able to provide detailed records, showcasing their working hours and flight schedules.
“I think [record keeping] is what HMRC, in my view, is likely to focus on, for people claiming full-time working abroad,” he explained.
This comes after it was revealed the UK government’s move to remove tax exemptions for non-doms would result in the Treasury’s revenues dropping by an estimated £12.2bn if half the number of non-doms leave by 2030.