He was asked why he did not do anything about the UK’s non-dom tax status in yesterday’s Autumn Statement.
The chancellor said the Treasury did not give him estimates on how much abolishing the non-dom tax status would raise and added that he would prefer the super rich “stayed here and spent their money here”.
He said: “They said to me that they were very unsure about the figures that were being bandied around, as far as the savings were concerned.
“Like me they wanted to be very sure they weren’t doing things that damaged the UK’s attractiveness. These are foreigners who could live easily in Ireland, France, Portugal, Spain, they all have these schemes. All things being equal, I would rather they stayed here and spent their money here.”
As to if the Treasury gave him a figure on how much abolishing the status would bring in, he said: “No, because we don’t agree with the figures that Labour have given. The Treasury did not tell me it was going to help the economy to do this, that’s why I chose not to do it.
“I’m not going to do anything that’s going to damage the long-term attractiveness of the UK, even though it gives easy shots to opposition parties, I think it would be the wrong thing to do in terms of creating jobs in the UK.”
In reaction, James Quarmby, partner private wealth and tax at Stephenson Harwood said in a linkedIn message: “The Chancellor, currently speaking on the Today programme, stated that he didn’t agree with claims that abolishing the non-dom regime would bring in more tax. He further stated that he would rather wealthy foreigners spent their money in the U.K. than elsewhere. Good on you Jezza and a welcome, but rare, outbreak of common sense!”.
Shadow Labour chancellor Rachel Reeves, who has vowed to abolish the regime, said that Jeremy Hunt is refusing to act over non-dom statuses that allow foreigners in the UK to avoid paying tax. She suggested it was the “only policy” the chancellor could not get signed off by No 10.
Dominic Lawson, the journalist and son of former chancellor Nigel Lawson, revealed in a Sunday newspaper column this week that his father had planned to abolish the non-dom system in 1988 but the idea had foundered.
KPMG has suggested that the most likely outcome is the Treasury will seek a consultation on changes to the regime.