The fact that such measures are being considered shows that the Conservative Party is in a difficult financial and political situation.
Jeremy Hunt is considering scrapping or reducing the 'no-dumb' tax relief that allows wealthy people to live in the UK while being considered to be living overseas.
Sky News said the measure was included in a list of potential revenue-raising measures to be assessed ahead of next week's Budget and could be enacted to give the Chancellor more scope for universal tax cuts. I understand.
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The move, first reported by the Financial Times, could raise more than £3bn for the Exchequer and comes after Mr Hunt and successive Conservative governments have resisted calls to abandon the idea. It would be politically interesting to think about it – the idea has been argued to make Britain more attractive to foreign wealth. Creators.
It is also a personally sensitive issue for the Prime Minister, who is his wife. Akshata MurthyThe daughter of the billionaire founder of Indian software giant Infosys, she previously benefited from her non-Dom status.
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What does “nondom” mean?
“Non-resident” is an abbreviation for “non-resident,” and in particular: tax The status of a person who is resident in the UK but whose permanent residence is abroad.
Non-Kingdom people only need to pay tax on money they earn in the UK, their overseas income and assets are not subject to UK tax, and they can benefit from this status for up to 15 years .
This allows wealthy individuals to make significant and completely legal tax savings if they choose to reside for tax purposes in a low-tax jurisdiction.
Labor has long supported abolishing non-dom status, proposing reducing the benefit period to just four years as a concession to what they call true temporary UK residents.
“We will only reduce taxes in a responsible manner.”
The Conservative Party is bound by its own rules.
That Mr. Hunt is now considering similar measures is indicative of both the fiscal strain and the political imperatives of an election year budget.
Mr Hunt is trying to fund personal tax cuts, which he and the chancellor believe are potential vote-winners, but is constrained by his own fiscal rules. arbitrary constraint set It aims to demonstrate responsible economic management.
These require debt to decline as a proportion of GDP in the fifth year of economic forecasts produced by the Office for Budget Responsibility (OBR).
These forecasts include headroom figures, the amount of 'spare' cash conceptually available to stay within the rules, which effectively sets up the chancellor's room for maneuver. Become.
The OBR has produced several forecasts for the budget, the latest of which will be submitted on Wednesday and the final version due on Friday.
Other measures reportedly under consideration include taxing e-cigarettes and cutting government spending, but many economists believe these are already inevitable with the government's current economic plans. There is.
Adopting Labour's popular plan, which only affects the richest, would give them a bit more leeway and cause little controversy other than charges of hypocrisy, but it would be a headache for the opposition, which says it will stick to the same fiscal rules. It might be a problem.
With one of its few independent sources of income already exhausted, Conservative strategists think: keir starmer and rachel reeves Mr Hunt will be forced to explain how he will raise money already earmarked for spending plans without raising taxes, which he hopes to reduce.
The Ministry of Finance declined to comment.
