Non-doms ‘confused’ by taxman

New guidance on the controversial issue of tax rules for ‘non-domiciled’ residents in the UK is confusing and could result in people paying too much tax, PKF has warned.

HM Revenue & Customs’ 400-page guidance, published last month, outlines tax rules for self-assessment taxpayers who classed as non-domiciled in the UK. The rules came into force on 6 April.

PKF, the top 10 firm, said some of the guidance appeared to introduce rules or take a harder line on non-doms.

Matt Coward, director of personal tax services at PKF said: ‘As far as individual taxpayers are concerned this guidance is too much and too late – as well as being potentially misleading.

'Some paragraphs of the guidance seem to introduce new elements to the rules established through case law – at the very least this could lead unrepresented taxpayers down the wrong path.’

The non-dom tax, introduced last year, charges a £30,000 levy for people who have lived in the UK for more than seven years but do not pay UK tax on their income and gains because of non-dom status.

Previously, individuals submitted a form to HMRC, which then decided if they would be classed as non-doms for tax purposes.

Under the rules taxpayers will have to decide whether they are domiciled in the UK for tax purposes when submitting the self-assessment returns to HMRC, which can challenge this decision.

HMRC was unavailable for comment as Accountancy Age went
to press.