Nigel Farage’s plans to introduce a ‘Robin Hood tax’ to attract the wealthy back to the UK would cost the economy £34bn a year, a leading tax expert has warned.
Dan Neidle of Tax Policy Associates has hit out at the Britannia card scheme proposal, which would allow wealthy people to pay a one-off fee of £250,000 and replace the former non-dom scheme scrapped by Tory chancellor Jeremy Hunt and current Labour chancellor Rachel Reeves.
Reform UK believes that the scheme would produce around £2.5bn a year which it plans to hand out as a dividend of £1,000 to those on the lowest incomes.
But Labour has damned it as a “bonanza for billionaires”, likening it to Liz Truss’s disastrous mini-Budget.
Meanwhile, in a scathing assessment, Mr Neidle warned: “We believe there are three very serious problems with the policy.
“First, it would discourage highly skilled professionals from moving here – they couldn’t afford the £250,000 and would face a much worse tax outlook than they ever have in the UK – and worse than most other comparable countries. The Reform UK proposal would make the UK uncompetitive.
“Second, all the recent changes to the non-dom regime mean that any Government would struggle to persuade the very wealthy that the ‘Britannia card’ would really provide a lifelong exemption, so take-up would be very limited.
“Third, and most seriously, the card would provide a very large and expensive tax windfall to a small number of very wealthy people who are already here. Office for Budget Responsibility data shows that this would amount to £34bn of lost Government revenue over five years. That would have to be funded by either tax increases or spending cuts.”
However, a defiant Mr Farage and Reform’s former chairman Zia Yusuf insisted that the scheme is already garnering interest and will “attract new money” to the UK from those who have left the country or do not want to come because of high taxes.
Mr Farage complained: “Over the last few years, a political narrative that has got stronger and stronger is tax the rich.”
He claimed that Tory and Labour governments “didn’t understand human behavior. Didn’t understand the sheer mobility that modern day entrepreneurs and wealthy people have the last year for which we have full figures shows that 10,800 wealthy people left the country, some of them non dons, some of them British too.”
Mr Yusuf warned that the current tax regimes are seeing investors flee the the UK.
He said: “We have to be honest about one of the key ingredients as to how one makes that happen. One key ingredient is that we need the wealthiest job creators, wealth creators and entrepreneurs to be here in the UK. And right now, the opposite is happening.”
He pointed to a Bloomberg report which suggested 4,000 company directors have left the UK since Labour came to power.
Mr Yusuf also pointed out that non-doms had previously contributed at least another £8.9bn in direct taxation from other taxes each year.
He said: “This card will be available to foreign internationally wealthy people who are going to come here and create jobs and take risk, as Nigel says, they will pay a landing fee of a quarter of a million pounds.
“So the UK will become incredibly attractive to the internationally wealthy, but they must contribute immediately to the prosperity of the country and make a direct contribution into the pockets and the bank balances of the lowest 10 per cent of earners in full time work.”
Ellie Reeves MP, chair of the Labour Party, said: “Nigel Farage’s new policy is quite simply a bonanza for billionaires.
“Not only is this a golden giveaway to the rich, but experts warn this will leave a massive black hole in the country’s finances that working people will be left to pick up the bill for.
“Reform UK is not serious or credible. Every family in the country would foot the bill for their dangerous and unfunded Liz Truss style policies which would devastate Britain’s economy.”
