Labour has defended its plans to scrap the non-domicile rule that allows some wealth UK residents to limit the tax paid on earnings outside of the country.
Labour leader Ed Miliband has said non-dom rules were “indefensible” and suggested that ending the tax status would raise “hundreds of millions” in tax.
However, shadow chancellor Ed Balls was forced to deny contradicting himself after previously saying that scrapping the status “would cost Britain money”.
Chancellor George Osborne suggested that these contradictions were a sign that Labour’s plans had “unravelled”, stating that they were an example of the “economic confusion” that would result from a Labour government.
Non-doms are defined as British residents who pay tax on their UK earnings but whose permanent home is considered to be outside of the UK.
Under current laws, non-doms do not have to pay UK tax on foreign income so long as it is not transferred to the UK, and instead they pay a charge of at least £30,000 once they have been in the country for seven years.
Well-known examples of non-doms reportedly include Chelsea owner Roman Abramovich and HSBC chief executive Stuart Gulliver. Some Labour supported including businessman Sir Gulam Noon have also had non-dom status in the past.