Thomas Eggar joins City revolt over non-doms’ tax” />
Thomas Eggar has joined leading City figures in their campaign against the tax crackdown on non-domiciled individuals living in the UK.
Tax partner James Quarmby has written to the Treasury to appeal against the reforms to the tax rules, which will be implemented from 5 April.
In his letter Quarmby argues that the tax changes will see non-doms pull their investments from the UK and plough their money into other countries instead.
He claims the clampdown will “help plunge the UK into a recession” as the rules will cause a massive dumping of UK property and set up potential fiscal barriers to consumer spending and investment.
The letter added: “It will be counterproductive, as instead of raising additional tax from non-domiciles it will achieve the opposite.” Quarmby told The Lawyer: “This legislation is not fit for purpose. Much damage has already been done and yet the rules are only in draft.
“Many individuals and businesses are planning to leave the UK as a consequence. The HMRC must act quickly to prevent further harm – a proper meaningful consultation with all interested groups must now take place.”
The call for an intensive evaluation of the impact of the tax changes has been backed by leading City figures, including Howard Bilton, chairman of tax advisers Sovereign, and the former president of the Chartered Institute of Taxation (CIOT) John Cullinane.
Cullinane, now the chairman of the CIOT’s corporate tax sub-committee, said the current proposals are damaging as the legislation is being changed overnight with no true evidence of the impact it will have.
“This is a fundamental change to the economic deal and already we’re seeing it’s having a psychological impact, with some people intending to leave,” said Cullinane, a tax partner at Deloitte. “Although we can’t see into the future to determine whether it would assist a recession, it’s already causing damage.”
Cullinane said the proposals as they now stand will affect the UK’s competitiveness.
“At the moment there’s no tax bill for interests in UK assets, but when that’s changed it would not make sense to, say, sell your art collection through Sotheby’s in the UK, so non-doms may look elsewhere,” explained Cullinane.