Expected tax revenues from abolishing non-dom status have been dismissed as “fantasy economics” by a former Government economist as he warned that the Chancellor is relying on deeply flawed assumptions to plug future gaps in public finances.
A new post-Budget analysis released today by economic consultancy ChamberlainWalker suggests that the forecasts underlying non-dom reforms are increasingly diverging from reality. The study, based on the Office for Budget Responsibility’s latest budget report and previous forecasts, concludes that the government expects to raise nearly $16 billion in tax revenue over the next three years.
Central to the government’s forecasts is the expectation that around £130 billion of foreign assets will be repatriated to the UK via the Temporary Repatriation Facility (TRF). This is part of the reforms introduced following the abolition of non-dom status in 2024. The OBR estimates this would generate almost £16 billion of tax revenue in the short term and contribute to projected revenues of £34 billion by 2029/2030.
However, ChamberlainWalker argues in his analysis that this optimism is based on three questionable assumptions. First, it says the Treasury is banking on large numbers of non-doms using the TRF, even though tax advisers are actively discouraging clients from doing so in its current form. While the government expects £360bn of foreign assets to be eligible, the report suggests there is little incentive for individuals to transfer funds without greater legal certainty.
Secondly, the analysis calls into question the assumption, unchanged in Budget 2025, that only one in seven affected non-doms will leave the UK. According to the report, current evidence suggests that departures may already be at least 50 percent higher than the OBR expected.
Third, it challenges the assumption that the remaining non-dom population has similar levels of foreign earnings and profits as those who have already emigrated. According to ChamberlainWalker, there are strong signs that those leaving the UK include those with significantly higher wealth abroad, including several high-profile billionaires, meaning the tax base could erode much faster than expected.
Chris Walker, founding partner of ChamberlainWalker and a former government economist, said the forecasts risk leaving a significant hole in public finances if they do not materialize.
“The government’s bet that it will receive almost £34 billion in tax revenue by 2029/2030 is based on increasingly unreliable assumptions,” he said. “The assumption that non-doms will move £130bn of taxable assets to the UK is fantasy economics under current legislation. Unless an accountant is willing to recommend the temporary repatriation facility, there is no chance of the receipts being anywhere close to the Chancellor’s budget figures.”
The report also warns that meaningful data on the real impact of the reforms may not be available until early 2027, leaving ministers effectively “crossing their fingers” that the revenue reaches Parliament later. While this may be politically convenient, the authors argue, it is no substitute for sound fiscal planning.
To mitigate the risk, ChamberlainWalker recommends targeted changes to the Finance Bill currently being passed in Parliament. The proposal would explicitly ensure that non-doms who use the TRF in good faith are not subsequently subject to anti-avoidance provisions or retroactive tax challenges. The report said such protection could help persuade more people to stay in the UK and bring foreign assets into the country, improving the credibility of revenue forecasts.
Without such changes, the analysis concludes, the government risks recognizing too late that one of its key sources of post-Budget revenue was based on hope rather than hard economic considerations.
