Non-doms ‘confused’ by taxman

New guidance on the controversial issue of tax rules for ‘non-domiciled’
residents in the UK is confusing and could result in people paying too much tax,
PKF has warned.

HM Revenue & Customs’ 400-page guidance, published last month, outlines
tax rules for self-assessment taxpayers who classed as non-domiciled in the UK.
The rules came into force on 6 April.

PKF, the top 10 firm, said some of the guidance appeared to introduce rules
or take a harder line on non-doms.

Matt Coward, director of personal tax services at PKF said: ‘As far as
individual taxpayers are concerned this guidance is too much and too late – as
well as being potentially misleading.

‘Some paragraphs of the guidance seem to introduce new elements to the rules
established through case law – at the very least this could lead unrepresented
taxpayers down the wrong path.’

The non-dom tax, introduced last year, charges a £30,000 levy for people who
have lived in the UK for more than seven years but do not pay UK tax on their
income and gains because of non-dom status.

Previously, individuals submitted a form to HMRC, which then decided if they
would be classed as non-doms for tax purposes.

Under the rules taxpayers will have to decide whether they are domiciled in
the UK for tax purposes when submitting the self-assessment returns to HMRC,
which can challenge this decision.

HMRC was unavailable for comment as Accountancy Age went
to press.

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