Abolition of non-dom status won’t drive people away from UK: Labour MP

Abolition of non-domicile tax status would not drive people away from Britain, shadow health secretary Wes Streeting said, citing ‘a case in point in Downing Street’.

Prime minister Rishi Sunak’s wife Akshata Murty agreed to pay taxes in the UK on her worldwide income after her non-dom status became the subject of a public debate earlier this year.

Sunak and Murty, the daughter of the Indian IT major Infosys’ co-founder N R Narayana Murthy, are ranked 17th on the Asian Rich List with an estimated wealth of £790 million.

The Labour party argues that scrapping the non-dom tax status - where foreign nationals living in the UK don’t have to pay taxes on their overseas incomes - would generate enough revenue for the government to train thousands of NHS staff.

However, Sunak warned that any abolition of the status would cost Britain financially as it could make rich individuals leave the country.

The Institute for Fiscal Studies estimates scrapping the status could fetch the exchequer around £3 billion annually.

Streeting told Sky News: “As for the claims that people would just take their money and go somewhere else - why is it that when it comes to taxing the wealthy it's far too difficult, but when it comes to picking the pockets of working people with punitive tax rises, that seems to be the Conservatives' first and last resort?”

He said the Labour party’s policy did not mean to “single out” Sunak and his family.

“But there is a case in point in Downing Street, isn't there? Someone who was a non-dom now pays their taxes here and hasn't left the country. And I think that would be the case in the vast majority of non-doms too.”

“I do think this is a fair way of funding a workforce plan,” the MP for Ilford North said.