There is no evidence for claims that Labour’s policy of scrapping non-dom status would contribute to an annual tax loss of £350m, the Treasury has admitted.

The Tories have previously poured cold water on Labour’s proposal, with health secretary Steve Barclay claiming earlier this month that the policy would cost the public purse more than it would raise by deterring investment, echoing an “internal Treasury analysis” made public in the Telegraph newspaper.

But the Treasury itself has now told openDemocracy that no such assessment of the non-dom policy was ever made.

The revelation will pile pressure on Rishi Sunak, who faced questions from Keir Starmer over the already-sensitive issue at Prime Minister’s Questions yesterday. Sunak’s wife Akshata Murthy claimed non-dom status, potentially saving her millions in tax, while her husband was chancellor, the Independent revealed last year.

Labour says abolishing the loophole, used by wealthy individuals to pay less tax in the UK, would raise £3.5bn in extra revenue, which it would use to train more NHS staff. 

But the Telegraph claimed that Treasury analysis of Labour’s joint plans to scrap non-dom status and raise taxes on investment funds found that “both policies… would lead to Britons fleeing the UK to avoid the taxes, leaving the government with a black hole of more than £350 million a year after five years”. The newspaper also raised the prospect of civil servants refusing scrap non-dom status if Labour wins the next election.

In a Freedom of Information request, openDemocracy asked the Treasury to disclose the non-dom analysis reportedly seen by the Telegraph.

The department initially said it did not hold the information requested, after which we asked for an internal review of the finding. Officials then “conducted further searches limited to information relating to non-dom status and the conclusion of analysis reported in the Telegraph article” – but came back empty handed. The Treasury press office subsequently confirmed that no such analysis exists.

Labour has previously urged the government to “come clean” and release any internal analysis the Treasury holds about the impact of scrapping non-dom status in January, after the chancellor, Jeremy Hunt, said he asked officials to “look into” what it would raise.

The Treasury did not confirm whether the analysis existed at the time, only saying that advice to ministers should remain confidential.

Non-dom, short for “non-domiciled individual”, is a tax status open to those born in a different country from the UK. A non-dom only pays UK tax on money earned in the UK but does not have to pay any tax to the UK on money made elsewhere in the world.

“The system has allowed wealthy foreign immigrants to enjoy all the benefits of living in the UK, while paying very little in UK taxes because they make the bulk, if not all, of their income abroad,” according to professor Ronen Palan from the international politics department at City, University of London.

“The regime can be used, or sometimes abused, by foreigners, or British citizens, to avoid paying tax altogether.”

A HM Treasury spokesperson said: “We want the UK to be a destination that will attract talented people to work and to do business here.

“The tax contributed by non-doms, which goes towards public services, is estimated to be worth £8.5bn a year, and they have invested over £7bn towards growth too since 2012 via the Business Investment Relief scheme.”

openDemocracy has approached The Telegraph and the Labour Party for comment.