BBA defends non-doms
Foreign workers in the UK contribute hugely to the economy and already pay income tax on their UK earnings, the British Bankers’ Association (BBA) has said.
In the BBA’s response to the Government’s consultation on non-domiciled workers, chief executive Angela Knight pointed out it was vital for the continued success of UK financial services that the UK remains open for business.
She said the industry – already contributing more than £100bn to UK economic growth – was concerned that hitting workers with extra taxes would reduce the UK’s ability to attract and retain top calibre people and investment in our economy.
The Treasury’s proposed package of plans to increase tax revenues from non-doms could end up costing the UK considerably more than the small amount it would raise, the BBA argues. It said that current plans should be deferred until a full impact assessment could be carried out on the likely cost to the UK.
Knight said: “The non-doms already pay Income Tax to the Chancellor on their UK earnings, the same as the rest of us. If they additionally have to pay a considerable annual levy on top, they will see this as a clear message that their presence is no longer valued by the UK, especially when considered alongside other measures the Treasury is proposing.
“The international view of the UK is that it is becoming by degrees less welcoming to business. If we put at risk our position as the centre of international finance, there will be countless other financial centres shaking out the welcome mats for those talented and industrious individuals who are currently contributing so much to our economic growth.
“These proposals would deal a devastating blow to the City, but would also affect those visitors from overseas who work in the arts, in research, in teaching, in medicine and many other roles. It could bring about a seismic change to our society yet the Exchequer’s benefit would be comparatively modest. We need more time for consultation with affected stakeholders and a full cost-benefit analysis to be carried out before these proposals go any further.”
The BBA paper also stresses the City’s loss of confidence in the Treasury’s consultation process, which of itself has been damaging to the perception of the UK by the international community.