More than one in five top earning bankers has benefited from non-dom status, according to a new report.

Unlike other UK residents, non-doms can avoid paying tax on their investments by locating them offshore.

This regime, which dates back to colonial times, allows resident in the UK to claim on their tax return that their permanent home ('domicile') is abroad.

The new study, by researchers from the University of Warwick and the London School of Economics, analysed the anonymised personal tax returns of everyone who claimed 'non-dom' status between 1997 and 2018.

Top earners – those in the top one per cent, earning over £125,000 - in other industries also benefitted from the status.

Two out five top earners in the oil industry and one in four top earners in the car industry have claimed non-dom status at some point.

"Whilst clearly most people have little idea about the non-dom regime, I think the biggest shock might be to bankers and others working in city jobs, when they realise how many of their colleagues are benefitting from a tax regime they don't have access to," said Assistant Professor Arun Advani.

The report also found that the very rich are much more likely to make use of non-dom status than those on lower incomes.

Four in ten people who earned £5 million or more in 2018 have claimed non-dom status at some point, compared with less than three in 1,000 among those earning less than £100,000.

This week chancellor Rishi Sunak has faced criticism over his wife's non-dom status, but he has maintained his position that she has not broken any laws.

Akshata Murty if one of the 93 per cent of non-doms who were born abroad.

Over the past two decades, the fastest growth has been from China and India where Ms Murty is a citizen.

Andy Summers, Associate Professor at LSE's law department and III, said: "The non-dom regime is used mainly by the very rich, who get tax breaks not available to ordinary taxpayers.

"This giveaway could be costing the treasury significant revenue and deserves more scrutiny at a time when everyone else is facing tax rises."