Non-dom tax trap expands to airport lounges

HM Revenue & Customs could be extending its arm to airport lounges as soon as April, as part of a range of tax reforms, which include the controversial clampdown on non-domiciled residents.

HMRC officials told tax advisers last week in an apparent concession to harsh tax reform covering non-domiciled residents, that anyone simply in transit through the UK would not have that day counted towards the 91-day tally which qualifies visitors as UK residents, even if they left one airport and traveled to catch a plane at another.

But the sting in the tail is that the reprieve will only apply if no work is done in the UK on the day in question, the Financial Times reports.

‘The example they give is of someone landing at Heathrow and then fitting in a meeting before catching a later flight from Gatwick,’ Andrew Tailby-Faulkes, an Ernst & Young partner, said. ‘What if you have a quick meeting with a colleague in Starbucks? Does sending emails from a laptop breach the new guidelines? And how will the rule be policed effectively?’

Further reading:

Darling denies pleas for non-dom delay

Muted response to govt’s non-dom concessions

Read story in the Financial Review