When adopted British steel king Lakshmi Mittal, Gala’s favorite philanthropist and one of the country’s most visible billionaires, quietly announced that he was moving his tax residency to Switzerland, it caused little stir in Westminster.
Another wealthy non-dom, moving to more fiscally friendly territory, shrugged his shoulders.
But for anyone involved in the UK charity sector, Mittal’s departure is more than a footnote in a tax policy debate. It’s a red flag. A warning. A canary collapses in the non-profit coal mine.
Mittal doesn’t go to Belgravia because he’s bored. As Daily Sparkz reported, his exit follows the dismantling of the non-dom system and, crucially, the threat of UK inheritance tax on his worldwide estate. He is not alone. Norwegian shipping billionaire John Fredriksen, German investor Christian Angermayer and technology founders Herman Narula (Improbable) and Nik Storonsky (Revolut) have already left Heathrow for a recurring reason circled in red: British tax policy.
And that, however we try to phrase it, raises a thorny question. One thing Chancellor Rachel Reeves hasn’t fully acknowledged in her haste to tighten the tax screws is that if Britain pushes out the very people who fund its museums, universities, research institutes and children’s hospitals, could British charities be the biggest losers in its brave new tax world?
Let’s be honest. Charities do not thrive on wishful thinking. They live on checks. And although the British public is generous in spirit, it is a handful of ultra-wealthy donors, people like Mittal, who are quietly funding the big things: foundations, buildings, specialized medical equipment, entire research departments. Mittal himself has donated millions over decades to Great Ormond Street Hospital, public libraries, the arts, humanitarian causes and the University of Oxford. If such people stay, Britain wins. If they leave, Britain loses.
This is not a defense of tax privileges for the wealthy. Reeves is right when he says the system needs reform. However, there is a difference between closing a gap and creating a deterrent effect. Between modernizing policy and deterring those who play an outsized role in keeping Britain’s charitable landscape alive.
The truth – and it almost feels unfashionable to say it out loud – is that large charities are very sensitive to tax signals. Wealthy donors don’t just give out of generosity; They give within systems that make generosity rational. Change the incentives, tighten the inheritance tax net, abolish the system that made London competitive and suddenly Dubai or Zug look less like a holiday home and more like a sensible postcode.
And when donors leave, charities suffer doubly. Firstly, by the immediate loss of millions of pounds worth of gifts. Second, by changing their funding model in the long term: fewer large, flexible charitable donations and greater reliance on small public donations, which, while admirable, rarely fund the expensive or ignominious parts of a charity’s work, the electricity bill, the IT system, nurses’ salaries, safety training. The things no one wants their name on.
It is too simple and too superficial for ministers to argue that “fairness” is above all else. Fairness to whom? A tax system that drives out philanthropists may be technically fairer, but it can also leave the country’s most vulnerable without the financial safety net that the government has neither the budget nor the political will to replace.
Additionally, philanthropy has reputational value. Billionaires giving large sums of money in Britain signal that the UK is still a place where good causes thrive, research advances take place and culture thrives. When they move, the narrative shifts: from “Britain, philanthropic powerhouse” to “Britain, too expensive to care.”
Charities know this. They have known it for years. But they also know something uncomfortable: you can’t replace a Mittal with 10,000 £20 donations. Not if you fund MRI machines, scientific breakthroughs or entire children’s hospices.
Where does this lead us? Best with a little honesty. The government must recognize that smart tax policy is not just about fairness but also about results. If Reeves wants to prevent charity CEOs from becoming professional beggars, she may need to combine her reforms with targeted incentives for impactful giving, or risk watching the voluntary sector shrink in real time.
Charities, meanwhile, must prepare for a new era: flatter donor lists, greater reliance on domestic donors and more resource-intensive fundraising, only to grind to a halt. The days of relying on a handful of loyal billionaire patrons may be coming to an end, not because donors have changed their minds but because the government has changed the rules.
If the exodus continues and more Mittals, more Fredriksens, more Narulas pack their bags, the question will not be whether Reeves’ tax reform was principled. What will matter is whether the price was too high, too blunt and too blind to its collateral damage.
And the biggest losers may not be the rich at all, but the charities that rely on them and the people those charities are supposed to help.
