Athens: Jeremy Penn, chief executive of the Baltic Exchange, has criticised the abolition of non-domiciled tax status mooted in the UK’s annual budget for 2015.
“I am today abolishing permanent non-dom tax status. From now on they will pay the same tax as everyone else,” UK chancellor George Osbourne said today.
As a result, anyone resident in the UK for more than 15 of the past 20 years will now pay full British taxes on all worldwide income and gains from April 2017. The move, Osbourne said, is “subject to consultation”.
“Withdrawal of tax arrangements for non-domiciled persons with over 16 years of residence would have a disastrous effect,” Penn said today.
“The chancellor has announced that the proposal will be subject to consultation and is not scheduled for implementation until 2017. We will play a full part in the consultation, aiming for a reversal of the policy, in the interests of protecting the UK shipping industry,” he continued.
Many foreign shipowners temporarily live in the UK and pay normal tax on their UK income and capital gains, as well as any remittances from abroad.
Non-domiciled residents who have been in the UK for a significant period of time currently pay up to £90,000 per annum to secure their non-domiciled status. This enables them to ensure their global businesses are not brought into the UK tax regime.
The Baltic Exchange estimates that shipowners who reside in the UK but whose global businesses are not subject to UK tax, contribute between £1bn and £2bn per annum in revenue to the UK maritime business services sector.