New statistics show that the top 1% of earners pay 28% of income tax, which comes to £85 billion. This is roughly three times what the bottom half of the workforce pay.
The problem with relying so heavily on such a small number of workers for such a large portion of our tax revenue is fragility. It means that fewer people have to leave to have more of an impact.
Some of these will be non-doms, and this is more likely if they are very high income earners: approximately 3/10 people earning over £5 million a year are registered as non-doms in the UK, of which there are roughly 74 000, up slightly since the Pandemic.
Non doms come mainly from Western Europe, America and India. And having non-dom status means they only pay tax on their UK earnings, not on their earnings abroad.
But that's going to change...
Jeremy Hunt, the previous chancellor announced that he'd be phasing out non-dom status before the general election. And now that Labour are in power they are more than likely to speed up this phasing out of non-dom tax status, so that people living in Britain pay income on all their world wide income.
But the problem with scrapping non-dom status is that it could also bring non-UK assets in line for inheritance tax, and that's potentially £millions of pounds£ per individual heading to the British State, which could make Britain a VERY unattractive country to live for Ultra High Net Wealth individuals.
I mean I think our inheritance tax is something like 40% over around £500K worth of assets, and with most non-doms earning £5 million you can imagine they have several £millions£ in wealth!
I mean personally I'm all in favour of taxing the rich more, I am firm believer that wealth is down mainly to luck and privilege, and I'm especially a fan of parents NOT passing down their wealth to their not-necessarily hard working or talented or deserving children.
However these policies have to be set within an international framework, otherwise wealthy individuals are just going to bugger off to countries which offer lower taxes, and there are plenty of those!
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