Farage proposes £250k tax break for non-doms, triggering backlash over ‘billionaire loophole’
Reform UK has unveiled a controversial new policy that would allow wealthy non-domiciled individuals to legally avoid paying UK tax on foreign earnings, income, capital gains, and inheritance — in exchange for a one-off payment of £250,000 every 10 years.
The so-called “Britannia Card”, announced by Reform leader Nigel Farage, is being marketed as a way to lure “tens of thousands” of high-net-worth individuals back to Britain by offering them tax certainty and a long-term exemption from UK taxes on overseas wealth.
Farage said the initiative would “bring in job creators and risk-takers” who, while exempt from certain taxes, would still contribute significantly to the economy through spending, investment, stamp duty and VAT.
But the policy has provoked strong criticism across the political spectrum and from leading economists, with Labour calling it a “golden ticket for foreign billionaires”, and the Institute for Fiscal Studies (IFS) warning that the plan was “far from clear” in terms of generating any net revenue.
A flat fee in exchange for sweeping tax relief
Under the proposed scheme, those granted a Britannia Card would pay the £250,000 fee once every 10 years in exchange for:
• Full exemption from UK tax on foreign income, wealth, capital gains and inheritance
• No requirement to pay UK inheritance tax
• No further tax liability on overseas earnings, even while living in the UK
Reform UK claims the scheme would raise between £1.5 billion and £2.5 billion annually, with all proceeds redistributed tax-free to the lowest-paid 10% of full-time UK workers, potentially adding £600–£1,000 per person per year.
However, the IFS and other tax experts say this is unlikely to add up. Stuart Adam, senior economist at the IFS, warned the exchequer would lose more in avoided tax from those who would have otherwise paid UK tax anyway than it would gain from the flat £250k fee. “The very fact someone is willing to pay a quarter of a million to avoid UK tax tells you how much they’re saving — and that could be significantly more than the government would receive,” he said.
Dan Neidle of Tax Policy Associates said the policy could cost the UK £34 billion over five years, citing Office for Budget Responsibility estimates. He also warned that the redistribution element was misleading, since many of the lowest-income households are not in full-time work and would be excluded.
“There’s a real risk that this policy won’t help the poorest, but will create a windfall for a narrow segment of workers while letting the ultra-wealthy legally sidestep billions in tax,” he said.
Who wins — and who might lose?
While Farage argues the move would bring capital and talent back to the UK, critics say it would undermine trust in the tax system, discourage highly skilled but less wealthy foreign professionals from relocating to Britain, and potentially inflate London’s already stretched property market.
Asked about this, Farage acknowledged that increased demand from wealthy individuals could impact property prices but insisted it wouldn’t affect the cost of affordable housing.
The policy also risks placing the UK out of step with other advanced economies, many of which have moved in the opposite direction by tightening rules on tax avoidance and increasing transparency for global wealth.
The backlash from mainstream parties has been swift. Labour Chancellor Rachel Reeves said the proposal amounted to a “tax cut for foreign billionaires” that would ultimately need to be paid for through cuts to public services or tax hikes on working families.
A Labour spokesperson added: “Nigel Farage can brand this however he likes — but this is a billionaire’s charter that would make Britain a tax haven for the super-rich while undermining funding for the NHS and schools.”
Conservative shadow chancellor Mel Stride joined the criticism, calling the policy “fantasy economics”. “Only Kemi Badenoch and the Conservatives believe in the fiscal responsibility our country needs,” he said.
The policy comes as the UK prepares to abolish the existing non-dom regime, which for years allowed wealthy residents to legally shield their foreign earnings from UK tax by claiming permanent residence elsewhere.
Under new Labour rules, due to come into force in 2026, all UK residents will be taxed on global income after four years. The government says this will raise £12.7bn over five years — a sum many argue is essential to fund public services.
Reform UK’s counter-proposal appears designed to appeal to Britain’s entrepreneurial class and global elite, but risks alienating voters who see it as a tax break for the ultra-wealthy at the expense of the broader population.
While Farage insists his £250k flat-fee policy is a pragmatic move to bring wealth and investment back to the UK, critics argue it amounts to a regressive giveaway that could widen inequality, reduce revenues, and damage public trust in the fairness of the tax system.
The policy may energise parts of the business community, but as scrutiny builds around its economic viability and distributional impact, it could become a litmus test for Reform UK’s credibility as a serious fiscal alternative.
Read more:
Farage proposes £250k tax break for non-doms, triggering backlash over ‘billionaire loophole’
