Reform UK has unveiled a controversial proposal that would allow non-domiciled individuals living in the UK to avoid paying certain UK taxes in exchange for an annual fee. The party’s plan introduces a new “Britannia Card,” available for a £250,000 yearly payment.
The Britannia Card: How it Works
Under Reform UK’s scheme, individuals holding the Britannia Card would be exempt from paying UK tax on wealth, income, or capital gains earned abroad. The plan also includes an exemption from UK inheritance tax. The proposed card would be renewable every 10 years without an additional upfront charge. This policy aims to replace the current rules governing non-dom status, which Labour is already in the process of reforming.
Reform UK’s Rationale and Proposed Redistribution
Party leader Nigel Farage claims the offer would attract “tens of thousands” of talented individuals, entrepreneurs, risk-takers, job creators, and investors to the UK. He argued that while the £250,000 annual fee is the initial payment, these wealthy individuals would contribute significantly more to the UK economy through domestic spending, including stamp duty and VAT, calling the fee “just the tip of the iceberg.”
Reform UK proposes that the revenue generated from the Britannia Cards – estimated by the party to be between £1.5 billion and £2.5 billion annually – would be transferred tax-free each year directly into the bank accounts of the lowest-paid 10% of full-time workers. Based on their estimates, this could provide between £600 and £1,000 per eligible worker.
Expert Warnings and Criticism
The proposal has faced significant criticism from tax experts and political opponents. Tax Policy Associates founder Dan Neidle and Dr. Arun Advani of the think tank CenTax have strongly contested Reform’s financial projections and the policy’s economic sense.
Expert analysis, citing figures from the Office for Budget Responsibility (OBR), suggests the Britannia Card scheme could cost the UK Treasury a substantial £34 billion in lost revenue over just five years. Critics argue that even if Reform collected £2.5 billion annually from the fee, this still amounts to an effective tax cut of at least £31 billion for wealthy foreigners who would otherwise pay considerably more in tax.
Experts warn that only individuals who stand to save significantly more than £250,000 per year in UK tax would opt for the card, making it primarily a large giveaway to a small group of extremely wealthy people. Furthermore, Reform’s plan includes abolishing the current four-year tax exemption for new UK residents (Labour’s planned replacement for the traditional non-dom regime). Experts argue this could actually discourage other high-skilled professionals, such as doctors, lawyers, and bankers, who might have benefited from the exemption but cannot afford the £250,000 fee, from moving to or staying in the UK.
There is also skepticism among tax professionals that the “very wealthy” would view the policy as credible enough to remain in place long-term, potentially making them unwilling to pay the substantial upfront fees associated with the 10-year renewal cycle. Critics also point out that Reform appears to have focused only on attracting new billionaires, potentially failing to consider the financial implications for existing non-doms for whom the fee would simply be an expense.
When questioned about the estimated £34 billion cost, Nigel Farage defended the plan but admitted he was “not clever enough” to address detailed costing questions, dismissing expert criticisms as “off-the-wall nonsense.”
Political Opposition
Labour’s Shadow Chancellor, Rachel Reeves, labelled the Reform UK measure a “tax cut for foreign billionaires,” arguing the resulting revenue loss would necessitate higher taxes on working families or cuts to public services like the NHS to compensate. A Labour spokesperson called it a “golden ticket for foreign billionaires” to avoid tax.
The Conservative party also criticised the plan, with Shadow Chancellor Mel Stride dismissing it as “fantasy economics” and “ruinously irresponsible.”
Context: Changing Non-Dom Rules
Reform UK’s proposal comes as the current government is already overhauling the UK’s non-domicile tax status. Traditionally, non-doms living in the UK but claiming a permanent home overseas were taxed only on UK income and gains, with an option to pay an annual fee (£30,000 or £60,000 previously) to avoid tax on foreign earnings if resident long-term. Around 74,000 people claimed non-dom status in 2022-23 according to HMRC.
Last year, the Labour government announced plans to abolish this status, replacing it with a new four-year regime for new residents. However, following concerns from the non-dom community and reports of wealthy individuals leaving the UK, Labour Chancellor Rachel Reeves indicated a potential softening of the transition phase for their reforms, which are projected to raise £12.7 billion over five years.
Reform UK’s Britannia Card plan is presented as an alternative approach, but one that analysts suggest would lead to significantly greater revenue losses compared to the existing or planned government policies.
