TaxCorporate Tax“Corporate emigration” could be challenged long after a move

"Corporate emigration" could be challenged long after a move

Companies relocating for tax purposes could feel the wrath of the taxman long after their move

UK companies locating abroad for tax purposes will be examined closely by HM
Revenue & Customs (HMRC) to ensure senior management activity has definitely
relocated, the
Financial
Times
reported today.

Dave Hartnett, HMRC’s permanent secretary for tax, has warned that companies
relocating outside the UK to minimise their tax liability will be closely
examined and could be queried years after a move has taken place.

Exiled companies could still be deemed UK resident if evidence – for example
emails, diary entries and phone conversation notes – hint that management
decisions are taken within the UK, even if board meetings are held abroad.

Hartnett said: “Some companies claim to have changed their residence and left
the UK. Investigation and litigation in the UK will establish that.”

Lawyers have advised companies to keep detailed evidence that their “central
management and control” has relocated following HMRC’s signal of their intention
to take a tough line on corporate emigrations.

“Properly advised companies will already be aware that moving their residence
abroad is easier said than done, but it is clearly in HMRC’s interest to ensure
that these seeds of doubt are properly sown,” said Caspar Fox, partner at law
firm Eversheds.

Related Articles

Watch out when winding up

Corporate Tax Watch out when winding up

1m Emma Rawson, ATT Technical Officer
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

4m Emma Smith, Managing Editor
‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

8m Emma Smith, Managing Editor
OTS report: Corporation tax should follow accounts

Corporate Tax OTS report: Corporation tax should follow accounts

10m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

11m Emma Smith, Managing Editor
Spring Budget 2017: Making Tax Digital

Business Regulation Spring Budget 2017: Making Tax Digital

1y Shereen Ali, Deputy Editor
Tax fraud loses HMRC £16bn

Corporate Tax Tax fraud loses HMRC £16bn

1y Emma Smith, Managing Editor
HMRC nets £2.6bn in corporate tax from big businesses

Corporate Tax HMRC nets £2.6bn in corporate tax from big businesses

1y Accountancy Age editorial