Read Professor Savage's statement
The report on the UK’s ‘non-doms’: Who are they, what do they do, and where do they live? which is published today represents a major milestone in measuring the significance of transnational ties amongst wealthy Britons. Reporting years of painstaking research in the secure data environment of HMRC, the UK’s tax authority, we have pieced together the scale of the ‘non-dom’ phenomenon amongst Britain’s highest earners. The non-dom clause goes back to 1799 when the Government needed to raise money to fight the Napoleonic Wars but wanted to protect aristocratic elites from being taxed on their colonial property by exempting income earned outside the UK from taxation. But, far from being an obsolete colonial throw back, it turns out that the non-dom phenomenon has been revitalised in contemporary capitalism and helps to grease the wheels of the UK’s place in the global economy. Although this should not surprise us, given the recent publicity about the presence of Russian oligarchs in the UK, we are, for the first time, able to furnish the hard numbers which allow us to go behind sensationalist stories. These reveal a much more complex story, in which affluent Europeans, Americans, and residents with ties to former British colonies are actually more frequent beneficiaries of non-dom regulations. Because we can trace trends back to 1997, we can show that this phenomenon is not declining, if anything, it is gaining increasing traction with rise of Asian economic power, notably from wealthy Indians and Chinese. I urge you to read the full working paper The UK’s Global Economic Elite: A sociological analysis using tax data for our full findings or read the policy brief.
I also want to write more personally that the kind of collaboration between economists, legal scholars, and sociologists that this research represents is exactly the kind of innovative research which the LSE’s International Inequalities Institute was set up in 2015 to achieve. When, along with the late Sir John Hills, I became the founding co-Director of the III we took the view that social scientists of all disciplines needed to collaborate together to address the scale and complexity of the inequality challenge. I’m very proud to have collaborated with Arun Advani (Warwick), David Burgherr and Andrew Summers (LSE) to make this vision more concrete. This paper is only the start of our research on this topic. Please make contact with any of us if you want to find out more about our plans and have ideas for further development of this work in the near future. And please also browse our website for details of our other linked projects.
Professor Mike Savage, LSE Martin White Professor of Sociology, convenor of III’s ‘Wealth, Elites and Tax Justice’ research theme.