Rachel Reeves goes to war with Rishi Sunak’s wife in bid to abolish non-dom tax status

Rachel Reeves outlines plan to 'abolish' non-dom status

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Shadow Chancellor Rachel Reeves insisted is is “not right that you can simply pay a fee and therefore avoiding paying taxes on your global income”. Rishi Sunak and his wife Akshata Murthy have faced scrutiny after it emerges she had been claiming non-dom status, thus saving millions in taxes whilst in the UK. Labour’s move to abolish non-dom status “will bring in at least hundreds of millions of pounds,” back to the Treasury, claimed Ms Reeves.

Speaking at BBC Breakfast, Ms Reeves said: “It is a basic principle, if you make Britain your home, you should be paying your taxes here.

“And by abolishing the non-dom status, that is exactly what we would achieve.

“The European tax observatory said [abolishing non-dom status] would bring in a billion pounds.”

She also added: “A senior tax lawyer said it would bring in at the very least hundreds of millions of pounds.

“At a time where ordinary people and businesses are seeing their taxes, especially National Insurance, go up, it is right that we close some of the loopholes that can make privileged few be able to get out of paying that fair share of taxes” 

BBC Breakfast presenter Sally Nugent asked the Shadow Chancellor: “How many non-doms are there at the moment?”

Ms Reeves replied: “There are 75,000 people today in the UK who are registered under the non-dom status for tax purposes”

She continued: “1,900 of them have been in the UK for more than seven years and therefore paying a fee of £30,000 or more to get out of paying taxes on their global income”

“There is a substantial number of people, which is why estimates say [abolishing non-dom status] would bring in at least hundreds of millions of pounds every year.

“It is an issue of raising that money to ensure we have money for our public services but also to keep taxes low for ordinary workers and businesses.”

Mr Reeves explained: “It is an issue of fairness, it is not right that you can simply pay a fee and therefore avoiding paying taxes on your global income.

“That is not available to the vast vast majority of people in the UK who do pay their fair share of taxes.”

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Mr Reeves concluded: “This is why we said we would abolish this status.”

The claims follow Labour’s vow to abolish non-dom status in the UK, which allows holders to declare their permanent home, or domicile, outside of the UK and consequently to not pay UK tax on their foreign income. 

The move from the Labour Party come after the revelation that Rishi Sunak’s wife Akshata Murty had been registered under the scheme for nine years and that such status has been used by the Chancellor’s wife to save up to £20m in UK tax.

In light of Labour’s move, Ms Reeves also said that Labour Party would replace the non-dom status with a “modern scheme for people who are genuinely livening in the UK for short periods to allow us to continue to attract top international talent”. 

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