Can't we tax foreigners the same as UK businesspeople?

by Henry Ejdelbaum, AIMS Accountants for Business

More from this author

05 Dec 2012

  • Comments
world-map

THE CURRENT TAX REGIME for foreigners is confusing and the government is sending out conflicting messages.

On one hand, we have the system of non-domicile with the benefits of not paying inheritance tax on all estate (only the UK assets); we have a system where we invite wealthy foreigners to the UK with the promise of a speedy and automatic citizenship process while still benefiting from the non-domicile regime; and we still have the system where foreigners can buy property through offshore trusts, thus avoiding stamp duties and so on.

On the other hand, we have hard-working UK business people who cannot afford any of the above and who pay the full tax rate. Ordinary business people, especially people operating SMEs, need to be persuaded that the tax regime for foreigners is beneficial to the UK economy – in short a British person running a business in the UK will probably end up paying more tax than a foreign person running a business in the UK.

But even if we accept that it is fair (and this could well be another discussion), one thing is absolutely clear: the tax regime for foreigners is confusing and conflicting, and this creates loopholes – and we can't blame the foreigners who exploit these loop holes. So maybe the chancellor should make a rational economic analysis because most other advanced economies do not offer these tax benefits to foreigners (as far as I understand the US, Germany or Australia do not do so, and presumably do not need incentives to attract foreigners to invest in their economies).

So my ideas for the chancellor for this week's Statement are straightforward: simplify the tax system by taxing foreigners in exactly the same way as UK business people are taxed.

Henry Ejdelbaum is managing director of AIMS Accountants for Business

 

Visitor comments

blog comments powered by Disqus
display:none

Add your comment

We won't publish your address


By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

Submit
  • Send

Newsletters

Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials

Careers

Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you

Briefings

budget-management

Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.

cchcover

iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.