Reform's ‘Britannia cards' will cost £34 billion

Spectator

5 days ago

Speaking today at Church House in Westminster, Nigel Farage announced that Reform will introduce a 'Britannia card' that will let wealthy foreigners pay a £250,000 fee to move to the UK, and live here exempt from all tax on their foreign assets. The move is an attempt to win over 'non-doms' alienated by Labour and Conservative governments and bring their wealth back into the country.
Farage may think his policy will attract 'talented people' from around the world, in reality it is more likely to deter them. Farage forgot about the Laffer curve
The party says the policy will raise between £1.5 and £2.5 billion annually. Our analysis of the data suggests it is more likely to cost around £34 billion over five years.
To understand why the policy will cost so much, it is important to look at the recent history of 'non-doms'. For many years, anyone moving here paid tax on their UK income and assets but were exempt from tax on foreign income and assets (unless they brought them into the country). There were then a number of reforms which introduced a £30,000 fee to keep this benefit – a fee which increased over time. Finally, in 2024 the Tories scrapped the non-dom regime and replaced it with a four-year exemption from tax on foreign earnings. Labour slightly tightened that exemption this year.
Reform is proposing to go back to the pre-2017 position for the very wealthy, with a new fee structure. Non-doms will be able to pay a one-off £250,000 for a 'Britannia card' and become tax-exempt on foreign earnings and assets forever. There's then a cute bit of populist politics: the £250,000 payments will be redistributed Robin-Hood style as a cash payment to the approximately 2.5 million workers earning a full-time salary of less than £23,000.
The party's 'low end' estimate is that 6,000 people will buy a 'Britannia card' each year – and on that basis the policy will generate £1.6 billion, meaning a £600 payment to each low-paid worker. Farage went further when he introduced the policy, saying 'tens of thousands' would be tempted to move to the UK and the payment would be 'just the tip of the iceberg of what these people will pay if they come back' because of the likes of VAT and Stamp Duty.
There are several big problems with this.
First, whilst the proposal makes the UK more attractive to the very wealthy who can afford £250,000, it makes the UK much less attractive to the highly skilled and highly paid professionals we want to attract from abroad – such as doctors, coders, senior scientists and entrepreneurs.
Many other countries have special tax arrangements to attract these kinds of expats. Under Reform's proposal, the UK would be very uncompetitive by comparison. Those unable or unwilling to pay the £250,000 upfront cost would suddenly have to pay full UK tax, and also any tax in their home country. Often these expats will have savings in their home country which benefit from a favoured tax treatment – much like an ISA. The prospect of those savings suddenly being subject to UK tax will not be appetising for them. Farage may think his policy will attract 'talented people' from around the world, in reality it is more likely to deter them. Farage forgot about the Laffer curve.
Second, Reform is planning to hand a windfall to a relatively small number of very wealthy people who were already planning to stay here and pay tax. They will now just have to pay a one-off £250,000, with the rest of their tax revenue disappearing.
The amounts involved are very large. The Office for Budget Responsibility suggests recent Conservative and Labour non-dom reforms will raise £33.9 billion from 2026-30, with most of this revenue coming from the Conservative's 2024 reforms. When wealthy individuals stop paying tax after they buy a Britannia card, this money will be lost – and will have to be funded by tax cuts or spending rises, especially as any Britannia card revenue will be given directly to those on low incomes. The OBR figure takes 'behavioural response' into account, and the OBR's record of tax projections is solid (their 2023 projection was just 4 per cent out).
Could this cost be overcome by attracting lots of very wealthy people to the UK?
That seems pretty unlikely. When the £30,000 annual non-dom fee was first introduced in 2008, only 5,000 people were willing to pay it. The idea that more than 6,000 people will pay £250,000 upfront is very optimistic. The idea that 6,000 will pay every year is almost inconceivable.
There's another problem here for Reform. Because the rules around non-doms have changed so much in recent years, few billionaires will truly believe they will be forever exempt from tax if they purchase a Britannia card. After all, no parliament can bind its successors. Unless you think Reform are going to win two or more elections in a row, you're unlikely to move here to benefit from the tax regime. That's particular the case after other countries have rescinded their previously generous tax offers for expats. Spain lured highly paid foreigners with its 'Beckham's law', but in the 2020s began to aggressively target people who'd used it. Portugal recently restricted its generous non-habitual residence regime.
High-net-worth individuals crave stability and predictability when making long-term decisions about where they are going to live. It's unlikely many will be attracted by a 'Britannia card' that could be cancelled in a few years anyway.