Rachel Reeves issued dire warning over ‘reckless’ tax as millions of ‘wealth creators’ to ‘flee’ Britain, damning report reveals
Rachel Reeves has been slapped with a dire warning that her “reckless” taxation of non-doms could drive millions of wealth creators out of Britain.
The latest independent analysis from the Centre of Economics and Business Research sets out an alarming economic outlook for the Labour Chancellor after the Treasury made tweaks to the policy earlier this year.
The shocking data has revealed that if a quarter of non-doms leave the UK after the reforms, the Treasury would not benefit at all, as the gains would amount to zero.
Even if no one leaves, Labour’s reforms are estimated to draw in a quarter of what the Office for Budget Responsibility forecasts.
Rachel Reeves has been slapped with a dire warning that her ‘reckless’ taxation of non-doms could drive millions of wealth creators out of Britain
PA
Speaking to the People’s Channel, shadow business and trade secretary Andrew Griffith said: “This independent research by CEBR shows that once again the Chancellor has got her sums badly wrong.
“Our economy can’t afford to be reckless about wealth creators leaving, taking the benefit to competitor nations.
“The Government should change course before even more damage is done,” he told GB News.
As it stands, around 60 per cent of British tax advisers expect more than 40 per cent of their non-dom clients to “flee” Britain after the legislation change, according to a study from Oxford Economics.
The analysis has also laid bare the ways in which increased emigration rates would prove detrimental to the Treasury’s funds.
LATEST DEVELOPMENTS:
The report has suggested that if, for instance, 33 per cent of non-doms leave the UK, Reeves’s department would take a hefty hit worth up to £700,000 across one year alone.
By 2029, the losses could span up to £3.5billion.
The forecast is far worse if the emigration numbers creep up any further. If 50 per cent leave, the Treasury could suffer a loss of £2.4bn within 12 months and more than £12bn by 2029.
Again, even if no one leaves, the OBR’s forecast appears much more hopeful than the data shown by Cebr.
In such a situation, Labour’s reforms would collect a static yield of £2.5bn in the first year. Meanwhile, the OBR’s readings suggest that the Treasury could rake in £10.3bn within the same timeframe – four times the amount that Cebr has estimated.
Andrew Griffith has hit out at Rachel Reeves over the dire forecast
PA
Weighing in on the shocking figures, former Tory adviser Aaron Newbury told GB News: “It’s no wonder people are fleeing the country, when Labour’s sole ‘achievement’ so far has been to earmark your hard-earned money as theirs.
“You don’t tax your way to prosperity, and Labour are finally learning that first hand. Taxes must come down, so we can stop this capital flight and get aspirational wealth creators back to the UK.”
Previously, Labour outlined in its election manifesto that it would abolish non-domiciled status in its entirety to raise money for public services and reform the “fairness” of the taxation system.
And, by the end of 2024, it was revealed that 10,000 millionaires fled the UK, marking a 157 per cent jump on the year before, data from global analytics firm New World Health and migration advisers Henley & Partners revealed.
However, in January, plans were amended to set out a gentler process to allow non-doms to redirect their finances towards Britain after the Chancellor claimed that she was “listening to the concerns” in the non-dom community.
GB News has contacted the Treasury for comment.