The number of people claiming non-domiciled tax status in the UK fell in the year leading up to the Government’s decision to abolish the regime, according to new figures from HM Revenue and Customs.
An estimated 73,700 individuals claimed non-dom status in the tax year ending April 2023. This represents a decrease of around 400 compared with the previous year, or about 0.5 percent. The total is also nearly 4,000 below the figure recorded in the 2019 to 2020 tax year, suggesting a gradual decline in take-up following a temporary increase after the pandemic.
The non-dom regime allowed UK residents whose permanent home, or tax domicile, was outside the UK to pay tax only on their UK income. Foreign income could remain untaxed in Britain, provided it was not brought into the country. The arrangement had long attracted high-net-worth individuals, entrepreneurs, and international investors to the UK.
However, the Labour Government officially abolished non-dom status in April 2024, citing the need for a fairer tax system and greater revenue generation. The policy followed widespread criticism that wealthy individuals were enjoying the benefits of UK residency without contributing proportionately to the tax base.
Former chancellor Jeremy Hunt previously estimated that ending the regime could raise £2.7 billion by the 2028 to 2029 fiscal year.
Although the number of non-doms declined slightly, HMRC reported that the overall tax contribution from those who held the status increased. In the 2022 to 2023 tax year, non-doms paid a combined £9 billion in income tax, capital gains tax and national insurance. This marks a £107 million increase over the previous year.
Despite that, the policy shift may be affecting the UK’s attractiveness to global wealth. The Sunday Times Rich List recently reported the largest recorded drop in UK-based billionaires, with fewer international high-net-worth individuals choosing to relocate to Britain.
For business owners, particularly those with international clients, operations or residency considerations, the end of the non-dom regime represents a notable shift in the UK’s fiscal landscape. The change may influence future decisions about where to base operations or invest personally, particularly for globally mobile entrepreneurs and senior executives.
As the new tax framework takes hold, firms advising high-net-worth clients are likely to see increased demand for cross-border planning and restructuring. Businesses with a strong international talent base may also need to monitor any further shifts in residency or employment incentives as the UK’s approach to tax evolves.
