Senior City of London bankers have urged Chancellor Rachel Reeves to soften plans for abolishing non-domiciled tax status, claiming the policy is prompting high-earning foreign workers to relocate.
At a breakfast meeting in No 11, representatives from major financial services firms, including BlackRock, Schroders, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley, raised concerns over the impact of ending the non-dom regime on the UK’s competitiveness.
Non-domiciled status, which allows UK residents to be taxed on a remittance basis rather than worldwide income, is set to end on 6 April. Reeves made a small concession in January, granting a simplified ‘temporary repatriation facility’ that offers discounted tax rates for bringing certain funds into the UK. However, bankers warn that changes to inheritance tax on existing trusts, coupled with the overall removal of non-dom benefits, risk accelerating the departure of ultra-wealthy individuals.
Latest data from analytics firm New World Wealth and investment advisers Henley & Partners shows a net 10,800 millionaires moved away from Britain last year, a larger outflow than anywhere but China. Seventy-eight centi-millionaires and 12 billionaires also left in 2024, according to the report.
Despite these statistics, Reeves has not shown signs of backtracking, insisting that the reforms will deliver an “internationally competitive” tax system. The Office for Budget Responsibility estimates the move could generate an extra £33.8 billion over the next five years.
During the meeting, industry figures also discussed simplifying ISAs to boost domestic investment in UK shares. In a separate announcement, Reeves said Britain will switch to a ‘T+1’ settlement cycle for securities, aligning with major markets such as the United States. “Speeding up the settlement of trades makes our financial markets more efficient and internationally competitive,” she added.
The Treasury declined to comment specifically on the non-dom debate but says it remains committed to ensuring the reforms work effectively for both businesses and taxpayers.
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City bankers press Reeves to ease non-dom clampdown as wealthy workers exit UK