Are the rich still fleeing Britain?

One of the first magazine cover pieces I wrote as economics editor was: ‘Go – Why the Rich Are Fleeing Britain’. It claimed that changes to the non-dom regime, first enacted by the Tories and made more strident by Rachel Reeves, were leading to a wealth exodus from the country. Worryingly for me, though, reading today’s Financial Times, it seems I may have been wrong.

The pink sheet reports: ‘Data suggests fears of UK “non-dom” exodus overblown.’ Its story says that claims – such as mine – that tax changes meant non-domiciled taxpayers were going to leave en masse were overdone. Data from HMRC shows that only 0.5 per cent of them have upped sticks and left. In raw numbers, that’s 400 fewer non-doms than the year before. When I saw the headline, I’ll admit, my stomach dropped.

But reading on, I was reminded of a crucial point I’d written in my story at the time. Some 15 paragraphs into the FT’s story, it admits: ‘The latest HMRC figures did not cover the tax year for 2025–26, the first in which the new rules applied.’ As I’d explained at the time, we won’t have tax-return statistics for the year the rules actually came into effect until well into 2027. Bizarrely, the FT story has taken evidence from the year before the rules actually started as proof that my – and others’ – report was wrong. As its own below-the-line comments explained: ‘The data released doesn’t cover the key period in question?’ and ‘Nobody flees a tax that hasn’t started. You leave when it bites – after April 2025, at a completed tax year, once the house sells and the school year ends. That data arrives in 2027.’

Don’t just take the FT readers’ views for it, though – I still think the data backs me up. First, even in the year the paper’s story refers to, 400 non-doms left the country. But add in the 800 ‘deemed domiciles’ who fled and the exit number grows to a more worrying 1,200. Figures also released this week from the Adam Smith Institute, relying on Office for National Statistics national accounts data, show the number of British millionaires has fallen to its lowest level in nearly 20 years – a decline of 7 per cent year on year. So yes, actually, the rich do seem to have taken off.

Look, if the numbers are not as bad as many people fear when we have the correct year’s data next April, I’ll be embarrassed. But I’ll also be quite relieved. Because the truth is that even the loss of one of our wealthiest taxpayers can leave a massive hole in HMRC’s balance sheet.

Zoom right in on the top 0.01 per cent of income taxpayers, for example – about 4,000 people – and they’re responsible for about £4 million each. That’s 6 per cent of the total income tax take. If just one of them is included in next year’s data, it would require the earnings of 1,300 average taxpayers to replace them. When the uber-rich leave, it’s the rest of us who suffer. So, for your sake and mine, let’s hope this time next year the FT gets it right and I have to send out a big old mea culpa.