What Conservative HQ staff think of Osborne’s tax plans

So, George Osborne wants to change the tax arrangements of non-domiciled residents.

Bit of a problem really that CCHQ staff think the following then:

A change in the tax status of non-domiciled resident individuals will devastate the London shipping business centred on the Baltic Exchange, cost thousands of City jobs, destroy London’s position as the international centre for shipping, undermine its ability to attract key foreign personnel in all its other areas of activity and result in a lower, not a higher, tax take for the Exchequer.

And who is it that thinks that? Well, it’s a quote from the Evening Standard approvingly reproduced in a document with Gavin Barwell’s name on it (he’s the man who runs the Ashcroft-funded Conservative key seats operation).

Ooops. 

Oh ok … I admit it. This document isn’t from this week, but rather from a previous CCHQ produced glossy colour leaflet attacking the Liberal Democrat tax plans. As I type this, it’s up on the Conservative Party website.

Perhaps time to remove it, do you think? Though if they do, you can still get it from my copy here.

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20 Comments

  • Good point Bridget. Alix: is every Polish plumber and Lithuanian cleaner non-dom? Is this an anti-immigrant policy in disguise?

  • Surely the “income threshld” is essentially voluntary. If you have enough income *sourced abroad* (what you earn in the UK is being taxed by HMRC anyway) that you think the UK authorities couldd ever find out about that would be enough to declare it and pay only £25k on rather than have it fully assessed and liable for a higher tax bill, that’s what you would do. It’s no more than an expensive “honesty box”.

    Hypotheically if you plumber or nurse were sending enough money back such that one day the interest they gained (assuming they’re not actually sending it back to feed their family anyway) on it came to more than £62k then yes, it might pay them to opt for this scheme.

    However I read last night an article that suggested that following a ruling in the case of Inland Revenue versus Mohammed Al-Fayed some years ago that this kind of thing it probably illegal anyway – effectively you’re taking a back hander to not bother looking into all their other sources of income. It does sound like graft to me too.

    Conservatives condoning corruption? Quelle surprise!

  • Grammar Police 3rd Oct '07 - 10:42am

    Bridget et al; isn’t the whole point about the non-dom issue that the Tories are saying if you want to keep your non-dom status (ie pay no tax on income earned *outside* the UK) then you’ll have to pay a one-off £25K. If you don’t want to pay that one-off £25K then your overseas income will be taxed – so it won’t affect money earned within the UK which is taxed as normal . . .

  • Grammar Police 3rd Oct '07 - 10:44am

    . . . and so Polish plumber or Lithuanian cleaners are not affected. Unless they’ve also got an income from abroad / investments they’re not benefitting from being a non dom

  • Grammar Police 3rd Oct '07 - 3:29pm

    I’m not implying that the Tories should or could do what they want with non-doms – merely pointing out that the Tories £25K payment is supposed to be to maintain the tax advantages on overseas income (yes, yes, technically you’re a non-dom or not, tax advantages are distinct).
    I guess the “logical” application of the policy to non-doms who don’t get the tax advantages because they don’t have overseas earnings worth taxing, but who pay PAYE, is that they would automatically be opted in/out (shake it all about) in the same way anyone who chooses not to pay the £25K would be. Ie they’d technically pay UK taxes on any small overseas earnings as well as on UK earnings, which they pay already.
    So to come back to Bridget, I don’t think we could go around saying that the new Tory policy would make Polish plumbers or Lithuanian cleaners pay £25K a year, as UK income earned by non-doms is already taxed and the £25K payment is only in return for not paying tax on overseas incomes (hell, why am I defending Tory policy here!) [Alix, I don’t think we’re really in disagreement here]

  • Grammar Police 3rd Oct '07 - 8:13pm

    You’ve got a point about Tim’s point; but you’re wrong in suggesting that we disagree about opting out of being non-dom: it’s clear you can’t. To be fair I don’t think the Tories are saying you can, merely that you will opt out of the tax advantages applicable to non-doms unless you’ve got a spare £25K . . . and now I shall return to writing literature to harry our useless Tory MP and squeeze the soft underbelly of his erstwhile Labour challenger.

  • Reading Labour’s version of the non-dom tax proposal http://www.hmrc.gov.uk/pbr2007/pbrn18.pdf there is no mentioning of actually changing the non-dom status if you don’t pay the 30k, only that you cannot use the remittance basis of taxation, i.e. for other legal purposes you can remain non-dom as I see it.

  • Grammar Police 11th Oct '07 - 5:54pm

    I think I’ve done enough of that, ta.

  • Any views on what would happen if a non-dom has been here for more than 7 years and choose not to pay the 30k, would he then be able to remit the overseas income from previous years free of tax thus making it clean capital.

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