Dragon's Den star breathes fire over non-doms

By Michael Millar
Business reporter, BBC News

Duncan Bannatyne says Britain's tax system is "unfair"

Duncan Bannatyne has added fuel to the non-dom debate after accusing fellow Dragon's Den judge James Caan of having an "unfair" advantage in business.

Mr Caan is a non-dom, and as such pays taxes on UK earnings but not on any made abroad that are not brought into the UK.

But Mr Bannatyne, who is worth £320m, told BBC Radio Five Live that Britain's "unfair tax system" could be exploited.

"We should be able to survive as a country where we all pay the same tax."

Mr Bannatyne argued that non-doms could exploit the tax system to minimise their UK tax bill.

He said a non-dom could set up a UK company followed by another company abroad that would then charge a large fee for "management services", effectively reducing profits for the first company and therefore reducing corporation tax.

"They claim they employ more people but as they grow and prosper and employ more and more people, British companies like mine that pay full corporation tax are having to reduce to compete with that," Mr Bannatyne said.

"If the country has more and more non-dom run businesses in 20 years time corporation tax has got to go up to fund the non-doms. The law has to be changed."

He added that the £30,000 charge incurred annually by non-doms resident in the UK for more than seven years should be "drastically increased".

We should be able to survive as a country where we all pay the same tax Duncan Bannatyne

Mr Caan, who is worth £65m, has recently opened a chain of health clubs called 'Nuyuu', which will compete with his fellow Dragon's Bannatyne Health chain.

However, Mr Bannatyne insisted his stance on non-doms was unconnected to the launch and Mr Caan has strongly refuted any suggestion that his chain is managed by a board of directors outside of the UK.

Mr Bannatyne said he had only used Mr Caan, with whom he has holidayed in the past, as a "case study", and was very confident the debate would not come between them.

'Change the law'

Mr Bannatyne said the law should be changed so any non-dom living more than 10 years in the UK ("or whatever period we can agree") should have to pay full taxes.

Government figures show non-doms pay around £4bn in UK taxes on UK earnings each year but Mr Bannatyne said the UK should not have to rely on these payments.

"We should be self-sufficient... we should be able to survive as a country where we all pay the same tax and not rely on handouts from people coming into the country as non-doms," he said.

Mr Bannatyne, a Labour party donor who has publicly backed Gordon Brown, also waded into the row over Lord Ashcroft, but denied he was doing it for political ends.

"In my opinion no one should be allowed to be an MP sitting in the House Of Commons, sitting in the Houses of Parliament, sitting in the House of Lords, unless they are fully dominated [sic] in Great Britain and pay British taxes," he said.

"It's not a political attack - I'm calling on any party now trying to win the next election to face this issue.

"Whoever puts themselves up for Parliament should put in their manifesto now 'this is how we're going to deal with this problem'," he said.

To hear the full interview listen to the Thursday's Tony Livesey Show on Radio 5Live, via the BBC iPlayer.