HM Revenue & Custom’s ability to cope with advising up to five million
migrant workers on how the non-dom tax crackdown might affect them has been
challenged by shadow Tory treasury minister Mark Hoban.
The Accountant MP questioned how those on lower incomes will be able to chose
which way to be taxed as non-dom as the Commons finished its detailed debates on
the Finance Bill.
The choice involves a technical decision whether to be taxed on a ‘remittance
basis’, and sacrifice personal allowances, or be taxed on an ‘arising basis’.
Hoban warned: ‘Those calculations will be made not just by high net worth
individuals who have access to expensive accountants and lawyers.
‘They will have to be made by migrant workers, seasonal workers, who come to
the UK to pick fruit and help in the agricultural industry, people from overseas
working in the NHS, skilled migrants entering through Home Office programmes,
international students and even Commonwealth citizens serving in the armed
Treasury financial secretary Jane Kennedy insisted a decision to double the
limit on making a tax return on overseas from £1,000 to £2,000 would reduce the
problem, and said HMRC would have plenty of time to put new resources in place
before the April 2009 deadline.
She promised there would be additional targeted help and guidance,but made it
clear she believed ‘the vast majority of low-income migrant workers are either
under the [new] £2,000 limit or better off on an arising basis’.
Hoban said later: ‘The original legislation on this was ill thought out and
has caused a great deal of uncertainty, even among advisers.
‘I am still not convinced the government knows how unrepresented taxpayers
will be able to comply.’
During extended debates Kennedy revealed the Treasury has slashed 400 from
the estimate of 3,000 non doms expected to leave the UK as a result of the
crackdown, insisting: ‘The UK remains an attractive place to live, work and do
She declined to reveal the estimate methodology resulting in the reduction.
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