Darling banking on 11th hour deal with US

Alistair Darling was last night involved in last minute negotiations with US officials after revelations he will be unable to confirm a key concession on non-domiciled tax changes in Wednesday’s Budget speech.

HM Treasury is planning to scrap a rule which would have left tens of thousands of US City workers facing double-taxation. But frantic negotiations and an extraordinary visit to Washington by senior treasury officials failed to get an official recognition the £30,000 levy on non-domiciled residents in the UK will be permitted against their US tax bills, according to The Daily Telegraph.

Although the US Internal Revenue Service has informally agreed that the levy will not be subject to double taxation by US tax authorities, it is unlikely to confirm this before later in March. This does not do much for the image of Darling, who has already had to make a number key concessions on his tax plan.

‘This is 11th-hour stuff and not the way we should be introducing legislation, involving our most significant trading partner - particularly in the financial services. All of this should have been thought about in advance,’ Mike Warburton of Grant Thornton, said.

Further reading:

Three business leaders urge tax changes scrapped

Taxman still wrangling over non-dom charge

Read story in The Daily Telegraph