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Jeremy Hunt is considering ending or reducing “non-dom” tax breaks that allow wealthy individuals to live in the UK while their wealth is considered as residing overseas.

Sky News understands the measure is on a list of potential revenue raising measures being assessed ahead of next week’s budget, and could be enacted to give the chancellor room to cut universal taxes.

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The move, first reported by the Financial Times, could raise more than £3bn for the exchequer and would be politically eye-catching given Mr Hunt and successive Conservative governments have resisted calls to abandon it – arguing it makes the UK more attractive to foreign wealth creators.

It is also personally sensitive for the prime minister, whose wife Akshata Murty, daughter of the billionaire founder of the Indian software giant Infosys, previously benefited from non-dom status.

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What to expect in the budget – from tax cuts to vaping duty

Akshata Murty. Pic. Reuters
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Akshata Murty. Pic. Reuters

What does ‘non-dom’ mean?

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“Non-dom” is short for “non-domiciled individual” and refers specifically to the tax status of a person who is a UK resident but whose permanent home is abroad.

Non-doms only have to pay tax on money earned in the UK, while their overseas income and wealth are not subject to UK tax – and they can benefit from the status for up to 15 years.

This allows wealthy individuals to make significant and entirely legal tax savings if they choose to be domiciled for tax purposes in a lower-tax jurisdiction.

Labour has long supported ditching non-dom status and has proposed cutting the duration of benefits to just four years in a concession to what they call genuinely temporary UK residents.

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‘We’ll only cut taxes in a responsible way’

Tories constrained by their own rules

That similar measures are now being considered by Mr Hunt demonstrates both the tightness of the public finances, and the political imperatives of an election year budget.

Mr Hunt is attempting to find money to fund personal tax cuts he and the prime minister believe are potential vote winners, but is constrained by his own fiscal rules, an arbitrary set of restraints intended to demonstrate responsible economic management.

These require that debt falls as a proportion of GDP in the fifth year of economic forecast prepared by the Office for Budget Responsibility (OBR).

These forecasts include a figure for headroom, the amount of “spare” cash notionally available to stay within the rules, and this effectively sets the chancellor’s room for manoeuvre.

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What is fiscal headroom?

The OBR prepares multiple forecasts in the run up to a budget, the most recent of which was delivered on Wednesday with the final version due to be handed over on Friday.

Other measures reportedly under consideration are a tax on vapes and cuts to departmental spending, though many economists believe these are already inevitable on the government’s current economic plans.

Adopting a popular Labour proposal that affects only the very richest would create a little more headroom and little controversy other than the charge of hypocrisy, but it might be a headache for the Opposition, who have said they will stick to the same fiscal rules.

With one of their few distinct revenue sources already used up, Conservative strategists believe Keir Starmer and Rachel Reeves would be forced to explain how they will raise money already committed to spending plans without raising the taxes Mr Hunt hopes to cut.

The Treasury declined to comment.

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Harriet Harman calls for ‘mini inquiry’ into race issues raised by grooming gangs scandal

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Harriet Harman calls for 'mini inquiry' into race issues raised by grooming gangs scandal

Harriet Harman has suggested a “mini inquiry” into issues raised by the grooming gangs scandal and called on Sir Keir Starmer and Kemi Badenoch to discuss “terms of reference”.

The Labour peer told Sky’s political editor Beth Rigby on the Electoral Dysfunction podcast that there should “openness” to a future probe as long it does not repeat the previous investigations.

In particular, she said people need to be “trained and confident” that they can take on matters “which are in particular communities” without being accused of being racist.

“I think that whether it’s a task force, whether it’s more action plans, whether it’s a a mini inquiry on this, this is something that we need to develop resilience in,” Ms Harman said.

The grooming gangs scandal is back in the spotlight after Elon Musk hit out at the Labour government for rejecting a new national inquiry into child sexual exploitation in Oldham, saying this should be done at a local level instead.

The Tories also previously said an Oldham inquiry should be done locally and in 2015 commissioned a seven-year national inquiry into child sex abuse, led by Professor Alexis Jay, which looked at grooming gangs.

However, they didn’t implement any of its recommendations while in office – and Sir Keir has vowed to do so instead of launching a fresh investigation into the subject.

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Ms Harman said she agreed with ministers that there is “no point” in a rerun of the £200m Jay Review, which came on top of a number of locally-led inquiries.

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Grooming gangs are ‘in every single part of our country’, Jess Phillips says

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Grooming gangs: What happened?

However, she said there’s “always got to be an openness to further analysis, further consideration of what proposals would move things forward”.

She called on the Conservative Party to start “sensibly discussing with the government what should be the parameters of a future inquiry”, as they “can’t really be arguing they want an absolute repeat of the seven years and £200 million of the Jay inquiry”.

She said the Tories should set out their “terms of reference”, so “the government and everybody can discuss whether or not they’ve already got that sorted”.

Girls as young as 11 were groomed and raped across a number of towns in England – including Oldham, Rochdale, Rotherham and Telford – over a decade ago in a national scandal that was exposed in 2013.

In many cases the victims were white and the perpetrators of south Asian descent – with the local inquiry into Telford finding that exploitation was ignored because of unease about race.

The Jay review did not assess whether ethnicity was a factor in grooming gangs due to poor data, and recommended the compilation of a national core data base on child sex abuse which records the ethnicity of the victim and alleged perpetrator.

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PM: People ‘spreading lies’ are ‘not interested in victims’

Ms Harman’s comments come after the Labour Metro Mayor of Greater Manchester, Andy Burnham, said he believed there was a case for a new “limited national inquiry”.

He told the BBC that a defeated Tory vote on the matter was “opportunism”, but a new probe could “compel people to give evidence who then may have charges to answer and be held to account”.

Jess Phillips, the safeguarding minister who has born the brunt of Mr Musk’s attacks, has told Sky News “nothing is off the table” when it comes to a new inquiry – but she will “listen to victims” and not the world’s richest man.

Sir Keir has said he spoke to victims this week and they do not want another inquiry as it would delay the implementations of the Jay review – though his spokesman later indicated one could take place if those affected call for it.

Tory leader Ms Badenoch has argued that the public will start to “worry about a cover-up” if the prime minister resists calls for a national inquiry, and said no one has yet “joined up the dots” on grooming.

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Pro-crypto CFTC boss, subcommittee rumored as Trump inauguration nears

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Pro-crypto CFTC boss, subcommittee rumored as Trump inauguration nears

New reports suggest the US Senate Banking Committee is looking to create its first crypto subcommittee, while Trump is reportedly eyeing a pro-crypto CFTC Commissioner to take the agency’s helm.

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UK order clarifies crypto staking is not a collective investment scheme

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UK order clarifies crypto staking is not a collective investment scheme

The UK Treasury has amended finance laws to clarify that crypto staking isn’t a collective investment scheme, which a lawyer says is “heavily regulated.”

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