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Vaccine billionaire Adar Poonawalla has attacked the UK’s plans to restrict “non-dom” tax breaks for wealthy foreigners and criticised post-Brexit immigration restrictions, warning they could lead to an exodus of investors.
The chief executive of the Serum Institute of India, the world’s largest vaccine maker, said he had invested more than £250mn in the UK, including paying over £130mn for a Mayfair mansion in London’s most expensive home sale last year.
But he told the Financial Times in an interview that recent policies such as the government’s plans to abolish the “non-dom” tax regime, which allows UK residents with a permanent home overseas to avoid paying UK tax on their foreign income and gains, were making Britain a harder place to do business.
“At the top level, the policy should be such that it encourages large groups and individuals to come and invest and stay in the UK . . . Instead of doing that, you’re making rules which would make people stay away.”
The Conservative government announced in March that it would scrap the colonial-era concept of domicile in tax, stealing a policy from the opposition Labour party, which is polling strongly ahead of a general election expected later this year. It will be replaced from next year with a residence-based system and cut the time people can benefit from the tax perks.
Poonawalla said he doesn’t spend enough days in the UK to be affected but that his wife Natasha Poonawalla, executive director at Serum and a fashion influencer, risks losing the tax benefits once the changes come into effect. “Some people are willing to pay that cost like I am, but most others aren’t,” he said. “They can easily move out.”
Tax advisers say popular alternatives for UK non-doms include Italy, Greece, Spain, Switzerland and the UAE.
In Italy, foreign national residents can pay a fee of €100,000 to get a tax exemption on their foreign earnings for up to 15 years. Greece has similar arrangements.
Poonawalla added he had spoken informally to both the Conservatives and Labour, and that whoever comes to power after the election needs to address tax and immigration concerns for the UK to remain competitive.
“If you’re going to make it impossible, virtually, for someone to stay there because you’re putting so much either tax burden or these restrictions on movement of labour and human beings, how are you supporting the businesses?”
The Labour party has pledged to go further than the Conservatives by closing a carve-out the government had left open that allows non-doms to permanently shield foreign assets held in trusts, settled before April 2025, from UK inheritance tax.
Labour “have to, in my view, support businesses, livelihoods”, said Poonawalla. “Otherwise I don’t know what’s going to happen in the next five years.”
The Treasury said: “Whilst bringing in an extra £2.7bn a year for public services by 2028-29, our new simpler system will remain internationally competitive to attract the best talent to the UK.”
Poonawalla said that tougher immigration rules introduced after Brexit had made it harder for employers to find staff. “That’s not good for any business. It’s going to drive up your prices or shut down certain businesses,” he said.
“We need to find a way in the UK to definitely encourage, on visa systems or whatever, to bring in anyone who wants to come freely and wants to work,” he added. “They’re not taking UK jobs. It is only enhancing and helping businesses in the UK, which in turn will help the UK public get more jobs.”
Poonawalla and the Pune-based Serum Institute, which was founded in 1966 by his father Cyrus, shot to global prominence during the Covid-19 pandemic as manufacturer of AstraZeneca and Oxford university’s vaccine.
Serum has since committed £50mn for a new vaccine research facility at Oxford university and partnered with the university on a new malaria vaccine, shipping the first batch this week.
“We’ve got a lot of investment [in the UK] and we’re going to continue investing,” Poonawalla added. “I want the economy to be strong.”
Additional reporting by George Parker in London