Chancellor retreats on non-dom tax changes

Business leaders in Britain have welcomed the news that the Chancellor has backed down on plans to raise taxes for foreigners in Britain.

Under the proposals aimed to boost taxes gathered from wealthy foreigners domiciled in the UK (non-doms), the Treasury had been planning to levy those who had used legal loopholes to dodge paying tax in Britain.

However, Alistair Darling has now announced a partial climbdown on the policy following lobbying from business organisations who claimed that the plans would deter investors and cause skilled foreign workers to leave.

The original proposal would have required non-domiciled individuals living in Britain to opt after seven years to pay a charge of £30,000 a year or comply with the UK's tax system.

Mr Darling has altered the scheme to cover only those earnings brought into the UK by non-doms, and the Treasury will not require full details of earnings or any back payments.

John Cridland, deputy director general of the CBI, has called the move "a victory for common sense".