British Finance Minister Jeremy Hunt, on Wednesday, Mar. 6, announced plans to eliminate the "non-dom" status, which enabled residents to sidestep taxes on foreign income. This move aligned with the Labour Party's stance and is anticipated to generate £2.7 billion ($3.4 billion) annually.
The non-domiciled status permitted UK residents to view the country as a non-permanent home and choose taxation solely on income earned or transferred within Britain, per Reuters. Hunt pledged a replacement system that is "fairer and more competitive globally," mirroring Labour leader Keir Starmer's language.
The proposed change exempts new arrivals from taxing foreign income for the initial four years of UK residency, aligning with Labour's intent to support the National Health Service through the elimination of non-dom tax.
However, Hunt's plan diverts funds to tax cuts, potentially pressuring Labour to disclose alternate funding for their healthcare investment without raising taxes or increasing borrowing.
(Photo : KIRSTY WIGGLESWORTH/POOL/AFP via Getty Images) Britain's Chancellor of the Exchequer Jeremy Hunt has drink and biscuits with employees during a visit to a builders warehouse in London on March 6, 2024. Britain's embattled Conservative government on Wednesday announced a fresh tax cut for millions of workers to woo voters before a general election expected this year.
Jeremy Hunt also announced a reduced capital gains tax on property sales from 28% to 24%. This tax adjustment primarily affects the sale of second homes. Government officials have unveiled proposals to prohibit single-use vapes and limit flavors, attributing the surge in underage vaping to these factors.
The anticipated UK vaping tax is slated to become effective in April 2025. Numerous US states and several European Union nations, such as Belgium and Portugal, have previously enforced levies on e-cigarettes. Although the European Commission has proposed a continent-wide vaping tax, its implementation has encountered delays.
UK Vaping Tax Gets Support from Major Tobacco Company
The CEO of British American Tobacco (BAT) has expressed support for the UK's proposed vaping tax, stating that the cigarette company appreciates regulatory measures.
According to the Financial Times, BAT CEO Tadeu Marroco supported a vaping tax and called for further regulation. In the spring budget, Chancellor Jeremy Hunt will likely impose a vaping levy on underage usage. The suggested tax rates may vary by e-cigarette nicotine concentration.
Marroco believes a UK vaping tax would help the government oversee the business and reduce the number of illegal vaping items.
IRS to Pursue High Earners
Meanwhile, in the United States, the IRS is targeting 125,000 high-earners who failed to submit tax returns from 2017 to 2021 to improve tax compliance. Around 25,000 people earning above $1 million and 100,000 earning $400,000-$1 million will get IRS non-compliance notices this week, as reported by VC Post.
The agency urges fast action to avoid follow-up notifications, higher fines, and greater enforcement. Failure-to-file penalties range from 5% to 25% of monthly outstanding tax. Starting with high-income taxpayers, 20,000 to 40,000 letters will be issued weekly.
The IRS notes that the 2022 Inflation Reduction Act's $80 billion revenue increase allows it to do essential tax administration tasks despite budget and personnel restrictions.
IRS Commissioner Danny Werfel emphasizes the importance of a well-funded IRS to tackle tax evasion and underscores this effort as a fundamental step in addressing non-compliance.
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