Rachel Reeves Accused Of A ‘Deal For Millionaires’ After Watering Down Non-Dom Plans

Rachel Reeves has been accused of a “Davos deal for millionaires” after announcing she was watering down moves to make wealthy foreigners pay more tax.

The chancellor said she had been “listening to the concerns” of “non-doms” living in the UK.

They enjoy a special status which allows them to avoid paying full tax in the UK on their overseas earnings.

Labour pledged to crackdown on that arrangement in their election manifesto, going further than measures announced by former former Tory chancellor Jeremy Hunt last year.

But speaking at the World Economic Forum in Davos, Reeves admitted she was softening Labour’s proposals after a backlash from those affected.

An amendment will be tabled to the government’s Finance Bill tweaking the so-called “temporary repatriation facility” allowing non-doms to pay lower rates of tax on their overseas income for the next three years.

Reeves said: “The previous government and this government have increased taxes on non-doms because we need to raise revenue to fund our public services.

“Debt as a share of GDP is close to 100%. We’ve been running persistent budget deficits. We needed to raise money.”

She added: “We have been listening to the concerns that have been raised by the non-dom community. And in the finance bill, we will be tabling an amendment which makes more generous the temporary repatriation facility, which enables non-doms to bring money into the UK without paying significant taxes.”

SNP economy spokesperson Dave Doogan said: “When will Rachel Reeves start ‘listening to the concerns’ of the many who have been hit by her Budget, instead of the millionaire few who have been lobbying her in places like Davos?

“Labour’s Davos deal for millionaires is the latest in a long line of examples of a Labour Party that has lost any sense of itself and what it used to believe in. It is little wonder that they are plummeting in the polls.”

A Treasury spokesperson insisted the changes will not reduce the £33.8bn that the government expects to raise from non-doms over the next five years.

But shadow chancellor Mel Stride said: “Labour’s Budget is falling apart in front of our eyes.

“At the election, Labour said their plans would raise money, now they have been forced to admit their plans make the UK less attractive. But the damage is already done – tax revenue equivalent to hundreds of thousands of taxpayers has already been lost.

“Labour simply does not understand business and the economy, and working people are paying the price.”