Introduction to the Britannia Card

Nigel Farage has announced a new tax policy that would allow wealthy foreigners to pay a £250,000 fee to move to the UK and live here exempt from all tax on their foreign assets. However, experts warn that this policy could cost the UK billions.

The Proposal

Under the Britannia Card plan, wealthy foreigners and returning British citizens would be granted a 10-year residence permit and tax benefits in exchange for a one-time fee of £250,000. The fees received would be distributed to 2.5 million of the lowest-paid workers, giving them approximately an extra £600 a year.

History of Similar Fees

Similar schemes were introduced under previous governments to try and tackle the issue of "non-doms". Non-doms are people born abroad but living in the UK, and who plan to return abroad. They live in the UK but are not legally domiciled here, and in a tax sense, they pay tax on UK income and assets, but had previously been exempt from tax on foreign income and assets.

Previous Fees

• In 2008, a £30,000 annual fee was introduced for non-doms who had lived seven years in the UK.
• In 2012, the fee was raised to £50,000 for people who had lived here for 12 of the previous 14 years.
• In 2015, a higher band was introduced, of £90,000, once people had lived here for 17 of the previous 20 years.
• In 2017, major reforms meant non-doms were automatically UK domiciled after living here for 15 of the previous 20 years.
• In 2024, Conservatives proposed a four-year tax exemption for new residents, after which they would become subject to income and capital gains tax as normal.

Criticisms of the Plan

According to Dan Neidle from the Tax Policy Associates, the plan may not attract as many people as expected. "No parliament can bind its successors, so unless billionaires believe Reform will have a majority for two or more terms, they are very unlikely to move to the UK in the expectation the ‘Britannia card’ will survive long-term," he says. Additionally, only 2,400 people paid the £30k and £50k charges in 2022, and a £250k charge will be attractive to a smaller number of people.

Potential Costs to the UK

Tax Policy Associates has raised a number of problems with the plan, warning that it could lead to a £34bn shortfall in government revenue. The proposal will attract the very wealthy who can afford such a fee, but it will deter highly paid professionals – doctors, scientists, entrepreneurs – from coming to the UK. The Reform UK proposal makes new arrivals fully taxable immediately, which makes the UK look uncompetitive compared to many other potential destinations.

Conclusion

The Britannia Card plan has been met with criticism and warnings of potential costs to the UK. While the idea of attracting wealthy individuals to the UK may seem appealing, the potential consequences of the plan must be carefully considered. The UK government must weigh the potential benefits against the potential costs and consider the long-term implications of such a policy. Ultimately, the success of the Britannia Card plan will depend on its ability to balance the needs of the wealthy individuals it seeks to attract with the needs of the UK economy and its citizens.