Rachel Reeves has reportedly caved in to non-doms after facing “intense lobbying” from wealthy UK residents.
The chancellor, who is currently in Davos for The World Economic Forum, told the Wall Sreet Journal’s editor-in-chief, Emma Tucker, that the Labour government have been “listening to the concerns raised by the non-dom community” and will amend the finance bill to soften planned changes to the tax regime.
It is believed that the government will increase the “temporary repatriation facility” which allows non-doms to bring money instantly to the UK without paying significant taxes.
Wealthy individuals had complained that the facility – originally brought in by the Conservative chancellor Jeremy Hunt – had been too tightly drawn, excluding some types of investment funds.
The Treasury has now signalled that these will be tweaked.
Those using the scheme will pay 12 per cent tax on any income brought into the UK for the first two years and 15 per cent in the third year.
Business secretary Jonathan Reynolds has confirmed the planned change, telling journalists in Davos: “There is a tweak to the finance bill.”
He added: “Of course, when you’re changing a tax regime, people will want to know, and there’ll be some uncertainty there, so we’ve got to get that message out.”
Reeves and Reynolds have been touring events and parties at Davos sending the message that the UK is open for business – with the chancellor saying that growth has to “trump” other concerns, including the government’s commitment to net zero.
The business secretary said: “We have a great pitch to make. We are talking to people who want to invest in the UK who are, I think seeing, first of all, our pitch to political stability, certainly relative to other European countries, and our commitment to openness.”
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