Expats in Britain paid almost £7 billion in taxes based on income generated in the country, according to the latest figures from HM Revenue & Customs (HMRC).
Non-domiciled resident taxes have surged by a fifth to £6.8 billion over the past three years.
Just £178 million or 2.6% of the tax take was attributed to the annual £30,000 charge expats pay on a remittance basis after staying in Britain for seven years.
Expats do not pay tax on their global income, just that originating in Britain under special tax arrangements to encourage entrepreneurs to invest in businesses.
Tax consultant Jason Collins of law firm Pinsent Masons argued that many believe wealthy foreigners contribute little to the British economy and avoid tax, but the reality is they pay a significant amount to the Treasury.
“The truth is their wealth gives them a huge opportunity to invest in businesses and jobs,” he said. “They can’t pump money into the economy if they are not here and plenty of other countries would welcome them and the benefits their money brings.
“The government needs to be careful these wealthy expats are not unfairly taxed and leave for somewhere else. The figures show they pay substantial taxes and this money helps pay for public services for everyone.”
Collins explained fears of losing their property and wealth in Arab Spring uprisings led many expats to settle in the UK, but tax concerns, like raising the annual remittance charge to £50,000 for non-doms in the UK for 10 years or more and threatened capital gains tax on property sales may drive them away.
Income tax for Andorra
Expats living in Andorra will have to pay tax income tax from January 1, 2015.
The Andorran General Council is introducing the law to improve revenue and financial stability for the tiny state tucked in the Pyrenees between France and Spain.
The income tax rate will be 10% on global income of more than £32,626 and 5% for earnings between £14,236 and £32,626. Interest on savings of less than £2,467 is exempt.
Tax reliefs will be available for families, the disabled and for buying a main home.
Property tax fears in Orlando
The British expat holiday haven of Orlando, Florida, is mulling increasing property taxes.
Mayor Buddy Dyer says the city is in the red and has had to draw £16 million from reserves to bail out public services in the past year despite cutting the city budget by £24 million.
Property taxes have stayed static for six years.
The alternative to raising taxes on homes would be axing more services, said Dyer.
