Deloitte urges review of tax on foreign secondments

Deloitte is calling on the Chancellor to urgently review new regulation on
the tax treatment of foreign employees on short term secondments in the UK to
avoid creating a costly administrative nightmare for the employees and their
employers.

It warns that, under the Finance Bill proposals, new residence and domicile
rules targeted at wealthy non-doms will have a dramatic impact on thousands of
middle income, internationally mobile employees working in the UK for limited
periods. This will increase the costs to their employer and reduce the
attractiveness of the UK to foreign multinationals.

The proposed legislation would require foreign employees temporarily assigned
to the UK to provide a detailed analysis of their overseas bank account and
perhaps their spouse if they make any direct or indirect fund transfers to the
UK. ‘This intrusive, costly, and sometimes quite pointless exercise will hit an
estimated 29,000 individuals, based on 2005-06 figures.’ a Deloitte statement
said.

Andrew Hodge, Deloitte head of employer and personal taxes, said: ‘How can
anyone believe that such a complex regime is suitable for individuals other than
the very wealthy? To avoid a compliance nightmare from 2009 onwards, the
government urgently needs to understand the impact of the changes, and if sense
prevails, will restore the historic basis of calculating remittances of overseas
earnings.’

Further reading:

Treasury backs down from taxing foreign sport stars