Fears of academic exodus over Darling’s ‘non-dom’ tax

0
248

Government proposals to introduce new taxes for non-domicile workers living in the UK has created concern among foreign academics at Oxford.Under the new system, currently being championed by the Chancellor, Alastair Darling, non-domiciled residents would have to pay tax to the UK government on their offshore income unless they agree to an annual levy of £30,000.The proposals have caused anxiety in the academic community as critics of the new tax system have argued that it could drive foreign academics back to their home countries, making it harder for university faculties to secure funding and donations from international sources. Oxford’s pool of foreign academics have responded to the news with mixed reactions. Arietta Papaconstantinou, from the Faculty of Oriental Studies, said,“There are number of academics here who come in after having completed their doctorates abroad, so this legislation would certainly affect us.“There have already been problems with this system [non-domicile taxation] in French universities, where  we saw people running from academic bases [after taxes were increased].“This legislation would be very bad for visiting Fellows in the colleges, most of whom are on paid sabbatical leave,” she added.Professor John Muellbauer said that there would be “serious implications for non-domiciles” were the government’s proposals to be introduced.“I imagine there would be some people who would be badly affected by [this tax]. I’d be most worried about the implications for teaching at Oxford, [it] being an international university.”Professor Peyton Young, James Meade Professor of Economics, is an American working at Oxford. He said, “I moved to Britain with the expectation of [tax] arrangements staying the same. It would be a nasty surprise to have the law changed so suddenly and without much thought.”A report in the Financial Times of the 21st February included comments from Julian Birkinshaw, Deputy Dean of the London Business School, who expressed concern that the tax proposals would damage the international composition of academics in the UK. But the report was quickly followed by the publication of a letter from Christopher Joubert, who disagreed with the opinion that the London Business School would be adversely affected by any non-dom taxation.“As an alumnus of the London Business School I am embarrassed by Julian Birkinshaw’s attempt to jump on the non-dom bandwagon by arguing that the school’s standing is threatened by the effect of the proposed taxation arrangements on overseas staff […] The school should be paying its staff post-tax salaries of a level sufficient to attract and retain them, irrespective of their tax status.”Knick Harley, Professor of Economic History at Oxford added, “I doubt it will have any major impact. It certainly didn’t factor in my decision when I took up my post here.“[The proposals] could have an affect if they change the position of donors who might become disenamoured with the UK.”The tax proposals have faced a spate of criticism from the national media. The latest round of debate has focused on the possibility that universities will be short-changed if wealthy non-dom donors decide to leave the country and take their financial support with them.Alastair Darling is expected to unveil the proposals in full as part of his budget next month.Non-Domiciles explainedDaniel M. Feingold
Strategic Tax Planning
‘Domicile’ is a legal term which indicates where an individual’s permanent home is located and thereby which national law their personal affairs are subjected to.Someone can claim non-domcile status if their permanent home is not the country in which they are currently working or living.As such, under current legislation, non-domiciles are only liable to be taxed on sources of income and capital gain which they bring into the UK from outside.Assets which remain in their home countries, however, are untouched. The chancellor’s proposals would mean that non-domiciles who have lived in the UK for more than seven tax years would have to face paying a tax on their offshore assets or an annual levy of £30,000.The people who are really going to be affected by this are the very wealthy or the super-rich, who will be able to pay the £30,000 annually as a cheaper option than paying tax.For academics, the real concern is if such welathy people decide to re-locate away from institutions like Oxford and therefore feel less inclined to support or provide donations to the university.”Cherwell News Team

LEAVE A REPLY

Please enter your comment!
Please enter your name here