The consultation into reforms to the taxation of non-domiciled residents only
closes at the end of February, but advisers are already growing tetchy that time
is running out for meaningful responses.
The government was supposed to have issued draft legislation on plans to levy
a £30,000 charge on non-doms who don’t pay tax on foreign earnings before
The draft legislation has since been delayed, with no date for its release set.
Experts believe that complexity and unintended consequences of the reforms
announced in the 2007 pre-Budget report are to blame.
‘There is a deep well of issues that have only started to come to the surface
and I think the Treasury has realised how complicated the issue is. I would like
to see the consultation postponed. We live in hope,’ says KPMG tax partner David
The issues Kilshaw refers to are numerous and other advisers have also warned
about the unexpected fall-out of the proposed non-dom reform.
Deloitte tax partner Bill Dodwell has said that a situation could arise where
secondees from overseas to City banks, lawyers and accountants could find
themselves in a situation where spouses and family members could find themselves
charged with a £30,000 levy.
He also warns that there is great concern among employers that they may have
to foot the £30,000 non-dom charge, a possibility that will remain up in the air
until draft legislation is finally realised.
Mike Warburton at Grant Thornton, meanwhile, has said the many Americans
working in the UK could also find themselves in an awkward position.
‘US citizens are taxed on worldwide income. It is unclear how a levy will
affect them. If it is income tax then it should be in proportion to income, but
it is not, it is a flat fee. There is a great deal of uncertainty,’ Warburton
With less than two months to go before the consultation, the Treasury has
plenty to do if the new non-dom legislation is to avoid all these pitfalls.
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