Election Countdown: Ed Miliband pledges to axe non dom tax rule that benefits the rich and save £1billion a year

Ed Miliband will announce plans to abolish the non-dom status which allows the super-rich to avoid paying hundreds of millions in tax.

An estimated 116,000 people are believed to be non-domiciled in Britain for tax purposes which means they only have to pay UK taxes on money they bring into the country.

But in a major election pledge, Mr Miliband will make everyone subject to the same tax rules.

It will force billionaires resident here, such as Chelsea owner Roman Abramovich and steel magnate Lakshmi Mittal, to pay taxes on their worldwide income and assets.

In a speech in Coventry, Mr Miliband will say: “It’s one law for a few, another law for everybody else.

This means higher taxes for working people and businesses, as well as starving money from our public services. In a world of tough choices, we just can’t allow this to continue.”

He says the new laws – which would come into force in April 2016 – will bring Britain into line with the US and France where residents have to pay tax on their overseas assets and earnings.

Experts estimate the non-dom loophole costs the taxman up to £1billion a year.

Mr Miliband will say: “There are people who live here in Britain like you and me, work here in 

Britain like you and me, are permanently settled here in Britain like you and me, but aren’t required to pay taxes like you and me because they take advantage of what has become an increasingly arcane 200-year-old loophole.

“There are now 116,000 non-doms, costing hundreds of millions of pounds to our country. It can no longer be justified.

No other major country in the developed world does it. It is unjust, it does not work, it holds Britain back – and we will stop it.”

 Under Labour’s plans, anyone resident in the UK will have to pay taxes on overseas income from

April next year.

There will be a few exceptions – for students coming to Britain to study and those working here temporarily.

 The money raised will go to paying down the deficit.

The Labour leader will also say: “Some people will say that if we change the rules people will leave the country.

Some of them are the same people who said back in 1997 that we shouldn’t introduce a minimum wage because it would cost millions of jobs.

Some threatened to leave the country then too. And guess what? They’re still here.”

Richard Murphy, of Tax Research UK, said: “This is the beginning of the end of the UK as a tax haven where ill-gotten foreign money hides itself in the City of London at a cost to us all.

There is no longer one tax law for the rich and one for everyone else. At last we are all equal.