Non-doms face tax return judgment day
25 Jan 2010, Santhie Goundar, AccountancyAge
http://www.accountancyage.com/aa/news/1770848/non-doms-tax-return-judgment-day
For non-domiciled taxpayers the tax filing deadline of 31 January for their 2008/09 return could be “the most important tax return of their lives", according to KPMG.
The rules for so-called “non-doms” living in the UK came into force in 2008, but David Kilshaw, KPMG’s head of private client advisory services, says this is the first time that the new rules will have an impact.
“UK resident non-dom taxpayers have to decide whether to claim the remittance basis – keeping their offshore profits outside the UK tax net – or to pay UK tax on their worldwide income or gains. For those living here for seven or more years, they also have to pay the £30,000 ‘fee’ if they want to use the remittance basis,” Kilshaw says.
“These are complex new rules, which tax payers and HMRC alike are struggling with. HMRC can be expected to enquire into a large number of returns to make sure they are correct, and rightly so. But it is also to be hoped their approach with be sympathetic and understanding. If HMRC were to be unduly aggressive or suspicious in their dealing with the returns filed, this could be the straw which causes many non-doms to leave the UK.”
Kilshaw concludes: “There are many rules and potential traps, so non-dom tax payers need to consider their returns very closely. One small slip could trigger a disproportionately high tax bill.”
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Visitor comments
Re Comment
Let's hope Mr Gold is happy to make up the tax loss from those who leave, let alone the income of service providers
Posted by: BWW , 27 Jan 2010 | 00:00
not another amnesty please !
Will we need another amnesty to catch all the honest ones who do not fill in their tax returns. How on earth is this going to be policed ? It will not be as easy asking the banks or stealing data from a bank.
Posted by: Spike , 27 Jan 2010 | 00:00
Re BWW's Comments
Never mind the tax lost from the ones who leave. It's the tax lost from the ones who are already here that should concern you more.
Oh - and you can call me Max. Mr Gold is too formal.
Posted by: Maximillian Bronstein Gold , 28 Jan 2010 | 00:00
Not all rich
The Change in the law is to be applied retrosectively. And thats the issue, changes in law should not be applied retrosectively. If successful in the courts HMRC will impact on more than just "rich" people. A lot of contractors and agency workers could be forced to pay tax bills that will financially cripple them for life. As to the super rich-well I agree let them suffer.
Posted by: Kieron Kehoe , 03 Feb 2010 | 00:00
Utter nonsense
"If HMRC were to be unduly aggressive or suspicious in their dealing with the returns filed, this could be the straw which causes many non-doms to leave the UK.?
Good riddance. We don't all suck up to the rich you know.
Posted by: Max B Gold , 26 Jan 2010 | 00:00
Balance of tax
I'm with Max on this one. The tax on the people who leave will probably be more than made up by tax on those who stay, despite no longer being able to avoid tax.
The FT says otherwise but it always sides with the rich on tax matters, which rather spoils a very good newspaper.
Posted by: Mike Page , 04 Mar 2010 | 00:00