Whilst Money Matters was being a little critical in last month’s article of Chancellor Rishi Sunak’s handling of the economy in his latest ‘Budget’, his wife was creating a series of headlines of her own. Apparently she hasn’t been paying tax on all her income in a way that the Chancellor would expect of the rest of us.

It’s all done through claiming that she is not domiciled in the UK, an outdated tax status that probably has no place in a modern taxation system. Instead of paying tax on all her income, her ‘non-dom’ status entitled her to pay a flat fee instead of a percentage of her total income to the Treasury. OK, it was probably £30,000 a year (in certain circumstances it could be £60,000), which is more than the majority of the population pay in tax during a full year. And it was almost certainly legal.

An option only available to the rich

But is it fair? Money Matters says no. ‘Non-doms’ can choose whether to pay tax on their income in the normal way or the flat fee. Clearly only those people who would have a massive tax liability would consider the flat fee option, as is the case of the Chancellor’s wife. It’s therefore only an option that is available to the very rich and that doesn’t seem at all fair to me.

The lady in question has stated that she has agreed to pay tax on all her income rather than just the flat fee. She doesn’t have to, as her husband has failed to outlaw the practice, but it’s clearly the correct move for the couple politically and it will, at least, put a few more millions into the Treasury’s coffers every year. But there is nothing that can be done about previous years and she could quietly go back to her old practices once the matter disappears back below this radar.

It’s not illegal but it is immoral

There are others, notably Premier League footballers and entertainers, who use the same or similar loopholes to avoid paying their fair share to the tax man. None of it is illegal but it’s definitely immoral and needs to be addressed by the Chancellor sooner rather than later.