The controversial tax on the UK's non-domiciled residents - people who live in Britain but pay little tax - will go ahead next month after the Chancellor refused to bow to wide-ranging pressure for his £800m tax grab to be deferred.

However, Alistair Darling has knocked £100m off his first-year target by allowing the £30,000 charge for "non-doms" to be treated as a tax downpayment for those with UK earnings.

The move follows criticism that foreign workers with earnings abroad but low income in the UK would have to pay the £30,000 levy and a UK tax charge on top, without the benefit of a personal allowance.

The Institute of Chartered Accountants in England and Wales warned only last week that the changes would lead to "a tax rise for large numbers of low-earning non-domiciles".

Patricia Mock, tax partner at Deloitte, said: "A lot of people who are non-domiciled in the UK never remit income to the UK, but people who do are going to be substantially better off than under the original proposal.

If you wanted to remit £75,000 it would have cost you £60,000, now it is only £30,000." She added: "It also moves it away from a levy to a down-payment on tax, which makes it eligible for double tax credit."

The proposals had been under serious fire for failing to exempt US-taxed non-doms from double taxation.

The new estimate is a £700m tax take next year, instead of £800m, but an unchanged £500m in 2009-10.

Ms Mock said: "It is good that he has listened to consultation around the practicalities."

But the strong lobby from across industry and the City of London fell on deaf ears.

Mr Darling said: "We welcome the contribution made by people born outside of the United Kingdom who choose to come and work here. They are an important central contributor to our economy's growth and prosperity."

But he added: "For those non-domiciled individuals or families who have chosen to make Britain their home I believe it is right and fair that they should, after seven years, pay a reasonable charge to maintain their right to be taxed differently to other UK residents."

As a further reassurance, which aroused jeers from Opposition politicians, the Chancellor said there would be "no further changes to this regime for the rest of this parliament or the next"

The planned £30,000 charge should be creditable against foreign taxes, and children will be exempt from paying it.

The British Bankers' Association had called for a regulatory impact assessment, claiming that the proposals "have already had a profoundly negative effect on the UK's reputation and will affect the attractiveness of the UK and its ability to remain the world's leading international financial centre".

The BBA said yesterday it welcomed clarification that beyond the levy, the Treasury would not seek to charge UK tax on offshore income or capital gains not brought into the country.

But it said it had "hoped for a clear message on non-doms that made it clear the UK welcomed them here we are concerned this has not been adequately given".

There are about 120,000 non-domiciles in Britain.

The Lord Mayor of London, Alderman David Lewis had claimed that a third of them were planning to sell their business assets, which would result in a loss of £2bn to the Exchequer.

Ms Mock said non-doms with interest-only offshore mortgages would still be able to fund them with offshore income, which was a significant concession, and there were two further changes which had not been expected.

One was a doubling to £2000 of the overseas income that could be remitted into the UK and disregarded, and the other an exemption for "clothes, shoes, jewellery and watches" and other personal effects which had been lined up for a tax charge when brought into the UK if they had been purchased out of foreign income. She said the original proposal had been "unbelievable".

Last week, HM Revenue and Customs, had been claiming there had been "misunderstandings" about the proposals, softening their impact.

It said those bringing foreign income into the UK would not have to give extra information on the source of the funds, the taxation of trusts would not be retrospective, and that only overnight stays in the UK would count towards the maximum 90-day rule for non-residency.