Labour's non-dom policy has 'basic errors' copied from Tories, say Whitehall sources

Labour's flagship "non-dom" policy was largely copied and pasted from the Conservatives even though it contains "basic errors" and risks damaging the UK's financial sector, Whitehall sources have told the Guardian.

- Anna Isaac

They claimed the chancellor, Rachel Reeves, had dismissed concerns raised by Whitehall officials about the potential negative impact of the policy, and is still set on introducing it in the manner her Tory predecessor, Jeremy Hunt, pledged.

"This is copy-pasting basic errors into the policy," a Whitehall source said.

Labour also promised to go further by ending non-dom-linked inheritance tax breaks that allow the rich to shield their wealth in offshore trusts.

It planned to spend the money raised on schools and the NHS.

A Treasury spokesperson said they could not comment on tax measures before the 30 October budget but added, without detailing specifics, that some of the claims were "inaccurate and misleading".

Reeves had hoped that closing extra loopholes used by non-doms would raise £1bn, but the Guardian revealed this week that the policy might actually reduce the tax take for the exchequer by triggering an exodus of the super rich.

Labour has long said it wants to raise more tax from wealthy people who live in the UK but have their tax residence elsewhere, via socalled "non-domiciled" tax status. There are about 74,000 non-doms in the UK.

The tax break triggered outrage after it was revealed in 2022 that it was used by Akshata Murty, the wife of the then chancellor Rishi Sunak and the daughter of the Indian IT billionaire NR Narayana Murthy.