The Confederation of British Industry (CBI) has urged the Chancellor to postpone next month’s implementation of what it called “ill-conceived” tax proposals on wealthy foreigners residing in the UK but claiming ‘non-domiciled’ status.

The Confederation of British Industry (CBI) has urged the Chancellor to postpone next month’s implementation of what it called “ill-conceived” tax proposals on wealthy foreigners residing in the UK but claiming ‘non-domiciled’ status.

This news comes ahead of the 12 March Budget, in which the Chancellor is expected to announce the introduction of a £30,000 levy imposed on non-doms wishing to keep their offshore financial activities beyond the reach of the UK taxman.

Amid fears that the City of London and the UK could lose its attraction for skilled people from overseas, the CBI has made a submission during the Government’s consultation period on non-doms, calling for a 12-month delay that would enable the Chancellor to begin a proper consultation and risk assessment.

According to a CBI statement, current proposals send out a message that the UK no longer wants to be an attractive place for foreign talent to work, and are damaging confidence in the stability of the tax regime.

This was reflected in a survey conducted by the Alternative Investment Management Association (Aima). Significantly, 60 per cent of those questioned across a sample of more than 80 UK-based hedge funds said they would be affected by the changes that come into force in April, leading Aima to warn that thousands of the industry’s top traders could be forced to quit the City unless the Government does a U-turn on its new non-dom tax rules.

“There is a real threat that key people will be forced to leave Britain – we’ve been really surprised by the speed of response and strength of feeling. We feel that the non-dom measure is policy on the hoof,” says Andrew Baker, deputy chief executive of Aima, referring to the Chancellor’s climbdown on more stringent aspects of the proposed non-dom tax regime, announced last month.

Further to this, analysis of Treasury figures, conducted by the CBI, has thrown up serious questions about its ability to raise the revenue it has claimed, leading the lobbying group to call for a 12-month delay that would enable the Government to begin a proper consultation and risk assessment.

Richard Lambert, CBI director-general believes a 12 month delay would buy the Treasury time to consult properly and iron out the confusion and inconsistencies whilst delivering breathing space to non-doms to plan their affairs properly.