Rachel Reeves Hit With Massive Blow as UK’s Richest Workers Flee Country Over Tax Shock – Experts Warn of Billion-Pound Fallout
Many wealthy people in the UK are now seriously thinking about moving abroad because of the government’s new tax rules. Since Chancellor Rachel Reeves decided to remove the special tax benefits for non-domiciled individuals or “non-doms,” who live in the UK but claim their main home is overseas it’s not just that group looking to leave. Now, even high earners who don’t fall into the non-dom category are starting to consider moving out of the country to avoid paying higher taxes.
A recent report said that the head of Goldman Sachs International has already moved to Milan. Lawyers who help wealthy clients with their taxes say more people are asking questions about how they can move offshore, even though the new tax year has already started. One lawyer, Michael Anderson, explained that a surprising number of his clients who are not non-doms still want to leave the UK just to save on taxes. He said he wouldn’t be shocked if many high-paid bankers were quietly planning to relocate — even if only for a year or two — so they can pay less.
This change in tax policy could end up costing the UK government billions. Experts say the loss might reach up to £12.2 billion by 2030 if enough wealthy people decide to leave and stop paying UK taxes.
There’s also a growing concern that many people who plan to move will try to become officially “non-resident” for tax purposes. That means they’ll claim they no longer live in the UK and don’t need to pay UK taxes. But the rules are strict. The UK tax authority, HMRC, is expected to closely check anyone making this claim. They’ll look at things like how much time these individuals spend in the UK and whether they’re truly working full-time in another country. People trying to qualify will have to keep detailed records of their work hours and travel history to prove they meet the rules.
Under the old non-dom system, someone living in the UK could avoid paying taxes on their overseas income by saying their permanent home was in another country. Labour has long argued that this setup was unfair and allowed rich people to pay less tax than others.
When Labour included plans to get rid of the non-dom rule in its manifesto, it caused a strong reaction. To calm things down, Rachel Reeves later announced a slower, step-by-step approach. She adjusted a plan called the “Temporary Repatriation Facility,” which lets former non-doms bring money into the UK at a lower tax rate over a three-year period.
Despite these adjustments, the government says it’s still committed to removing the old non-dom system. A spokesperson for the Prime Minister said the new system will make taxes fairer, attract skilled people and investment, and make sure long-term UK residents pay their fair share of taxes.
But with more wealthy people now thinking about leaving, the UK could soon face a wave of departures — and that could have serious consequences for the economy.
