Election 2015: Ed Miliband promises Labour will scrap non-dom tax status

Labour will scrap the controversial non-domicile tax status which allows wealthy individuals to reduce the amount of tax paid on income earned outside the UK, Ed Miliband has promised.

The Labour Leader will argue the 200-year-old rule can no longer be justified and is turning Britain into an "offshore tax haven".

Miliband will say abolishing non-dom status will ensure anyone who is permanently resident in the UK "will pay tax in the same way".

The Conservatives have said the tax status benefits the UK as it attracts wealthy visitors to live here. There are an estimated 110,000 so-called non-doms in Britain, including people like billionaire Chelsea football club owner Roman Abramovich.

In a speech at the University of Warwick, Miliband will say: "I don't blame people for taking advantage of non-dom status. I blame governments for fostering a system that can be taken advantage of.

"There is a moral reason for it too. We all use the same roads, we are all protected by our police and armed forces, even those who go private sometimes rely on the NHS. It is the common good. We use these same services therefore we all owe obligations to help fund them according to our ability to do so."

The tax status was recently highlighted during the HSBC Swissleaks scandal, when it emerged that many British non-doms had hidden their money in the Swiss private banking arm of the bank and avoided paying taxes anywhere.

HSBC's chief executive Stuart Gulliver was also able to claim non dom because he previously worked in Hong Kong, despite haven being born, raised and worked in the UK.

Miliband is expected to show a "tax gap" between what is owed and what has been collected has risen to £34bn ($50bn) under the coalition government.

He will say: "Tax havens are continuing; the scandal at HSBC has been brought to the heart of government; the hedge funds are given the green light to avoid paying their fair share; HMRC seems to operate double-standards. It's one law for a few, other 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, difficult choices, we just can't allow this to continue."

Chancellor George Osborne continues to favour the tax status. "I want to preserve the non-dom status that makes our country attractive," he said. "But I want them to pay a fair contribution while having certainty about their future arrangements."