Dubai-Based Britons Hesitate to Return Over Tax Concerns; UK to Raise English Requirement for Permanent Residency; HMRC Recovers £16bn in Corporate Taxes
- TBA
- 1 day ago
- 5 min read
Britons in Dubai fear leaving war-hit Middle East because they might get taxed at home
As tensions escalate between the United States, Israel, and Iran, tens of thousands of British citizens remain stranded in the Middle East. However, some interviews indicate that certain British influencers and expatriates living in Dubai, United Arab Emirates, are cautious about returning to the UK. One reason is concern about becoming UK tax residents again.
UAE analyst Amjad Taha said many people believe life in the UAE remains safe: “In the UAE, everyone is protected.” The UAE has a zero personal income tax policy for residents, which is also a key factor attracting large numbers of Britons to relocate there.
According to media reports, more than 240,000 British citizens currently live in Dubai. With its low tax rates, international environment, and business opportunities, the city has in recent years become a major hub for wealthy Britons, influencers, and entrepreneurs.
The issue of these overseas Britons has also sparked debate within the UK. Ed Davey, leader of the Liberal Democrats, criticized in Parliament some “tax exiles” and “has-been celebrities” seeking British protection in Dubai. He said: “Our armed forces should protect British citizens around the world in times of crisis—but that apparently also includes tax exiles who mock ordinary taxpayers.”
Journalist Isabel Oakeshott, who moved to Dubai in 2024 and was mentioned in the criticism, responded that such claims misunderstand the contributions of Britons living abroad. She said: “We may not pay as much tax as before, but we still pay far more than the average person. And so-called tax exiles have not asked to be rescued.”
UK Prime Minister Keir Starmer emphasized that all British citizens should receive the same consular assistance regardless of their tax status.
Home Secretary Yvette Cooper said that after the United States and Israel launched strikes on Iran, Iran carried out retaliatory attacks. Currently, about 130,000 British nationals living in the Gulf region have registered with the government’s safety registration system, while the total number of British expatriates in the region is about 300,000.
At present, the UK Foreign Office has not asked citizens to leave the UAE, but it has advised against “all non-essential travel.”
Migrants will have to speak English to A-level standard before they can settle permanently in Britain
Last week, Home Secretary Shabana Mahmood again proposed a series of detailed immigration reform measures, including raising the language requirement for migrants seeking permanent residency. Under the new policy, starting in 2027, immigrants applying to settle permanently in the UK will need English proficiency equivalent to the UK A-Level standard.
Under the new rules, applicants for Indefinite Leave to Remain (ILR) will have to demonstrate a relatively high level of English in reading, writing, speaking, and listening.
The current requirement is set at the GCSE level, but the new policy will raise it to A-Level level. The rule is planned to take effect in March 2027, giving migrants roughly one year to prepare.
In last week’s speech on immigration policy, the Home Secretary emphasized:
“Working hard, learning the language, and contributing to the community — that is the contract we are now writing into law.”She also referred to different positions on immigration policy in the UK, saying the Labour government aims to strike a balance between two extremes: neither the strict restrictions advocated by Reform UK leader Nigel Farage — described as “pulling up the drawbridge and shutting the country off from the world” — nor the open borders approach promoted by Green Party deputy leader Zack Polanski.
In addition to the language requirement, the new policy will tighten access to welfare support for some migrants. According to the plan, migrants may lose taxpayer-funded housing and benefits if they:
Break the law
Work illegally
Rely on public funds despite being capable of supporting themselves
The government says the move is intended to reduce the roughly £4 billion spent annually on asylum support.
At the same time, the government also plans to extend the time required for most refugees to qualify for permanent residency from five years to ten years. However, the waiting period may be shortened for people in shortage occupations, such as doctors.
More immigration reform measures are expected to be announced in the upcoming King’s Speech scheduled for May this year.
HMRC investigations claw back £16bn tax from corporates
A new analysis by the National Audit Office (NAO) shows that the UK’s HM Revenue and Customs (HMRC) has significantly increased tax investigations into large companies to identify potential compliance risks. In the 2024/25 fiscal year, HMRC recovered about £15.8 billion in tax, more than double the £7.1 billion recovered in 2021/22.
The NAO reported that by 2025, HMRC had investigated around half of the UK’s large businesses, with the total potential tax at stake reaching £52.6 billion. About 44% of these investigations were concentrated in three sectors:
Banking: about £8.6 billion in potential tax
Telecommunications: about £7.8 billion
Retail: about £7.0 billion
Data also shows that in 2024/25, large businesses contributed £337 billion in taxes. When all tax types are included—such as corporation tax, National Insurance contributions, VAT, insurance premium tax, and fuel duty—large companies paid a total of £377 billion during the fiscal year.
The figures also highlight a high concentration of tax contributions. According to the data:
The top 50 corporate taxpayers for corporation tax paid about £21.5 billion, accounting for 48% of the total.
The top 50 VAT-paying companies paid about £40 billion, representing roughly 53% of VAT collected from large businesses.
Meanwhile, the tax gap among large companies—tax that should have been paid but was not—has been gradually declining over time:
2005/06: £7.5 billion (first recorded)
2023/24: £5.8 billion
About half of this tax gap arises from differences in interpretation of tax law between businesses and HMRC.
The report also analyzed how HMRC identifies cases for investigation. Of the corporate tax investigations launched in 2024/25:
More than 33% came from companies voluntarily disclosing issues.
19% resulted from routine risk assessments conducted by HMRC.
The NAO recommends that HMRC develop a detailed plan to make full use of upcoming IT system upgrades. It also calls for improvements in tax data recording quality to better evaluate operational performance.
The report further suggests that HMRC should improve communication with companies under investigation, particularly by clearly explaining the purpose when requesting data and maintaining consistent procedures across all compliance investigations.
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