UK Budget

Old Mar 27th 2011, 12:18 pm
  #1  
Bored liberal
Thread Starter
 
Meow's Avatar
 
Joined: Feb 2007
Location: Over there ----->
Posts: 13,705
Meow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond repute
Default UK Budget

No mention of this BE Middle East?

Aside from the usual stuff there was a specific point raised that will affect a few people on here:

"Statutory Residence Test

The current rules that determine tax residence for individuals are unclear and complicated, and practitioners have long called for the introduction of a statutory residence test. The Government intends to issue a consultation document in June with a view to implementation from April 2012."



So for those who are already looking a little shaky under HMRC6, it is likely to get stricter and you might not be able to claim non-residency for income tax in respect of overseas earnings if you own a home in the UK, all your family are there and your income is sent back to the UK.

Obviously, nothing concrete has been announced yet, but something to think about.

(And for those who are interested there will be an overview of the budget on my blog in a couple of days.)
Meow is offline  
Old Mar 27th 2011, 12:21 pm
  #2  
Millhouse is not a meme
 
Millhouse's Avatar
 
Joined: Aug 2009
Location: Disneyland, Dubai
Posts: 14,406
Millhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond repute
Default Re: UK Budget

Originally Posted by Meow View Post
No mention of this BE Middle East?

Aside from the usual stuff there was a specific point raised that will affect a few people on here:

"Statutory Residence Test

The current rules that determine tax residence for individuals are unclear and complicated, and practitioners have long called for the introduction of a statutory residence test. The Government intends to issue a consultation document in June with a view to implementation from April 2012."



So for those who are already looking a little shaky under HMRC6, it is likely to get stricter and you might not be able to claim non-residency for income tax in respect of overseas earnings if you own a home in the UK, all your family are there and your income is sent back to the UK.

Obviously, nothing concrete has been announced yet, but something to think about.

(And for those who are interested there will be an overview of the budget on my blog in a couple of days.)
Ahmen - my income tax indemnity.
Millhouse is offline  
Old Mar 27th 2011, 12:57 pm
  #3  
ex-expat
 
Hello.Kitty's Avatar
 
Joined: Nov 2008
Location: in front of my computer - in sunny Sussex!
Posts: 2,162
Hello.Kitty has a reputation beyond reputeHello.Kitty has a reputation beyond reputeHello.Kitty has a reputation beyond reputeHello.Kitty has a reputation beyond reputeHello.Kitty has a reputation beyond reputeHello.Kitty has a reputation beyond reputeHello.Kitty has a reputation beyond reputeHello.Kitty has a reputation beyond reputeHello.Kitty has a reputation beyond reputeHello.Kitty has a reputation beyond reputeHello.Kitty has a reputation beyond repute
Default Re: UK Budget

ooo, all the more reason for us to move back then! Well, maybe.

Saying that, just thinking about it, surely they will have to set up some kind of new tax bracket for it... I mean, how could they properly justify (not that they need to) taxing someone who doesn't benefit from the, er, benefits. Surely they would then have to open up the services that taxation pays for to tax-paying non-residents. Seems like a bit of a can of worms for them really.

I mean, if there's no longer any benefit in being non-resident, then you may as well carry on being on the NHS's books and pop back for treatment, claim benefits (such as will be left) and whatnot.
Hello.Kitty is offline  
Old Mar 27th 2011, 1:10 pm
  #4  
Hit 16's
 
Bahtatboy's Avatar
 
Joined: Mar 2010
Location: Of all the gin joints, in all the towns, in all the world, she walks into mine
Posts: 13,118
Bahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond repute
Default Re: UK Budget

Originally Posted by Meow View Post
So for those who are already looking a little shaky under HMRC6, it is likely to get stricter and you might not be able to claim non-residency for income tax in respect of overseas earnings if you own a home in the UK, all your family are there and your income is sent back to the UK.
Oh good. I tick all those boxes...
Bahtatboy is offline  
Old Mar 27th 2011, 1:22 pm
  #5  
Hit 16's
 
Bahtatboy's Avatar
 
Joined: Mar 2010
Location: Of all the gin joints, in all the towns, in all the world, she walks into mine
Posts: 13,118
Bahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond repute
Default Re: UK Budget

Although for some 8.5 as it stands currently seems pretty clear:

8.5 Leaving the UK to work abroad as an employee
If you are leaving the UK to work abroad full-time, you will only become not
resident and not ordinarily resident from the day after the day of your
departure, as long as:
• you are leaving to work abroad under a contract of employment for at least a
whole tax year
• you have actually physically left the UK to begin your employment abroad
and not, for example, to have a holiday until you begin your employment
• you will be absent from the UK for at least a whole tax year
• your visits to the UK after you have left to begin your overseas
employment will
– total less than 183 days in any tax year, and
– average less than 91 days a tax year. This average is taken over the period
of absence up to a maximum of four years.
Bahtatboy is offline  
Old Mar 27th 2011, 2:17 pm
  #6  
Token Scandinavian Bloke
 
norsk's Avatar
 
Joined: Jun 2009
Location: Dubai
Posts: 2,820
norsk has a reputation beyond reputenorsk has a reputation beyond reputenorsk has a reputation beyond reputenorsk has a reputation beyond reputenorsk has a reputation beyond reputenorsk has a reputation beyond reputenorsk has a reputation beyond reputenorsk has a reputation beyond reputenorsk has a reputation beyond reputenorsk has a reputation beyond reputenorsk has a reputation beyond repute
Default Re: UK Budget

Originally Posted by Bahtatboy View Post
Although for some 8.5 as it stands currently seems pretty clear:

8.5 Leaving the UK to work abroad as an employee
If you are leaving the UK to work abroad full-time, you will only become not
resident and not ordinarily resident from the day after the day of your
departure, as long as:
• you are leaving to work abroad under a contract of employment for at least a
whole tax year
• you have actually physically left the UK to begin your employment abroad
and not, for example, to have a holiday until you begin your employment
• you will be absent from the UK for at least a whole tax year
• your visits to the UK after you have left to begin your overseas
employment will
– total less than 183 days in any tax year, and
– average less than 91 days a tax year. This average is taken over the period
of absence up to a maximum of four years.
It took me 8 tax years to gain non-residency from Norway, so I was quite chuffed with the current method in the UK.

When I left Norway they claimed I still had a connection to the country (I had a few bank accounts, my mum was still living there, i had a student loan etc). It was all completely ridiculous of course and I applied a number of times over the first 4 years only to be turned down by the same person each time (in one of my final letters to the tax authorities I claimed that the person had it in for me and that the whole case was personal). This was after about 3 years...

Shortly after I discovered that there was a loop hole in the law allowing me to not declare the income as long as it was not made in Norway. I could be audited of course so there was a bit of a risk, but it was unlikely to happen since I wasn't exactly making millions or anything.

If I ever go back to Norway I expect it will take another 8 years to gain non-residency.
norsk is offline  
Old Mar 28th 2011, 7:13 am
  #7  
Not an evil hypnotist
 
typical's Avatar
 
Joined: May 2007
Posts: 1,975
typical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond repute
Default Re: UK Budget

Why say it's likely to get stricter, Meow? I'm not sure that's the direction this government is going in. They're already looking to shift the tax base downwards (e.g. cutting the 50% tax rate while putting up one of the most regressive taxes there is, VAT).

The current rules give HMRC quite a lot of scope to go after people who take the piss. The new rules could well make it easier for people to 'play' the rules and become/stay non-resident.

It'd be a strange constituency for the Tories to annoy.
typical is offline  
Old Mar 28th 2011, 7:23 am
  #8  
Hit 16's
 
Bahtatboy's Avatar
 
Joined: Mar 2010
Location: Of all the gin joints, in all the towns, in all the world, she walks into mine
Posts: 13,118
Bahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond reputeBahtatboy has a reputation beyond repute
Default Re: UK Budget

Originally Posted by typical View Post
Why say it's likely to get stricter, Meow? I'm not sure that's the direction this government is going in. They're already looking to shift the tax base downwards (e.g. cutting the 50% tax rate while putting up one of the most regressive taxes there is, VAT).

The current rules give HMRC quite a lot of scope to go after people who take the piss. The new rules could well make it easier for people to 'play' the rules and become/stay non-resident.

It'd be a strange constituency for the Tories to annoy.
Its surely a logical step to make expats pay some tax. The extratorritality of the US tax laws is quite likely something the treasury has looked at. There's a considerable brain-drain (myself excluded) from the UK. Expats tend to get higher salaries than they would in the UK, and most could probably comfortably afford, say, a 10% flat rate of income tax. HRMC guidelines are just that: guidelines; a law that laid down the criteria for determining income tax liability should make things clearer and easier to manage.

I can't really see many arguments against it.

I have no idea about the "expat constituency" being mainly Tory--is that true?
Bahtatboy is offline  
Old Mar 28th 2011, 7:26 am
  #9  
Bored liberal
Thread Starter
 
Meow's Avatar
 
Joined: Feb 2007
Location: Over there ----->
Posts: 13,705
Meow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond repute
Default Re: UK Budget

Originally Posted by typical View Post
Why say it's likely to get stricter, Meow? I'm not sure that's the direction this government is going in. They're already looking to shift the tax base downwards (e.g. cutting the 50% tax rate while putting up one of the most regressive taxes there is, VAT).

The current rules give HMRC quite a lot of scope to go after people who take the piss. The new rules could well make it easier for people to 'play' the rules and become/stay non-resident.

It'd be a strange constituency for the Tories to annoy.

Because it was announced in the budget that the rules will be tightened and it's the logical step. I know for a fact that HMRC wants to tax more of the expats who are not fully committed to be being non-resident.

Expats are not a 'constituency'. Most don't even vote.
Meow is offline  
Old Mar 28th 2011, 8:04 am
  #10  
Not an evil hypnotist
 
typical's Avatar
 
Joined: May 2007
Posts: 1,975
typical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond repute
Default Re: UK Budget

Originally Posted by Bahtatboy View Post
Its surely a logical step to make expats pay some tax. The extratorritality of the US tax laws is quite likely something the treasury has looked at. There's a considerable brain-drain (myself excluded) from the UK. Expats tend to get higher salaries than they would in the UK, and most could probably comfortably afford, say, a 10% flat rate of income tax. HRMC guidelines are just that: guidelines; a law that laid down the criteria for determining income tax liability should make things clearer and easier to manage.

I can't really see many arguments against it.
The US is very unusual in this respect, though. Also, apart from being difficult both to monitor and to ensure compliance - how do you check someone's overseas earnings? - it's significant overhead, and I've seen no signs of the Government reversing the last's ridiculous cuts to HMRC.

And you repeat my point - by moving from guidelines to laws, you inevitably make it easier for at least some people to game the system.

Originally Posted by Bahtatboy View Post
I have no idea about the "expat constituency" being mainly Tory--is that true?
I don't know if it's possible to say for sure - expat voters have their votes counted like anyone else in General Elections.

However, the socioeconomic level of expats who earn enough to pay a hypothetical UK tax along the US lines would be consistent with many being Tories.

Originally Posted by Meow View Post
Because it was announced in the budget that the rules will be tightened and it's the logical step. I know for a fact that HMRC wants to tax more of the expats who are not fully committed to be being non-resident.

Expats are not a 'constituency'. Most don't even vote.
Sorry, I don't mean to nit-pick but where did they say the rules would be tightened?

I don't doubt your information, but the government is at best sending confusing signals here - ending tax on remittances by non-doms (albeit increasing the annual charge for those resident for 12+ years) and exempting corporation tax from foreign branches of UK firms.

Expats ARE a "constituency". I did not claim they were a Parliamentary consitutency (they do not vote for their own MP), however the word is also in common usage to mean "a particular body of people", which is exactly what expats are.

Added to which, even if the vast majority of expats do not vote while expats (and the number registered to vote is pitiful), many do return to the UK later - and vote then.
typical is offline  
Old Mar 28th 2011, 8:09 am
  #11  
Not an evil hypnotist
 
typical's Avatar
 
Joined: May 2007
Posts: 1,975
typical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond repute
Default Re: UK Budget

It's also far, far easier for US citizens to vote from abroad than for UK citizens to do so. No taxation without representation and all that
typical is offline  
Old Mar 28th 2011, 8:12 am
  #12  
Bored liberal
Thread Starter
 
Meow's Avatar
 
Joined: Feb 2007
Location: Over there ----->
Posts: 13,705
Meow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond reputeMeow has a reputation beyond repute
Default Re: UK Budget

Do re-read my original post. I didn't say anything would specifically happen, but it was a bit of general information that was not covered in most of the UK press. The latter comment is my view. (An informed one when it comes to these matters.)

Word on the street (at HMRC anyway) is that things will be tightened, and many people are in a very grey area when it comes to HMRC 6.

Meow is offline  
Old Mar 28th 2011, 8:18 am
  #13  
Millhouse is not a meme
 
Millhouse's Avatar
 
Joined: Aug 2009
Location: Disneyland, Dubai
Posts: 14,406
Millhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond repute
Default Re: UK Budget

Originally Posted by Meow View Post
Do re-read my original post. I didn't say anything would specifically happen, but it was a bit of general information that was not covered in most of the UK press. The latter comment is my view. (An informed one when it comes to these matters.)

Word on the street (at HMRC anyway) is that things will be tightened, and many people are in a very grey area when it comes to HMRC 6.

I'm always worried about my UK bank accounts... I only use them to transfer money through them.
Millhouse is offline  
Old Mar 28th 2011, 8:38 am
  #14  
Not an evil hypnotist
 
typical's Avatar
 
Joined: May 2007
Posts: 1,975
typical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond reputetypical has a reputation beyond repute
Default Re: UK Budget

Originally Posted by Meow View Post
Do re-read my original post. I didn't say anything would specifically happen, but it was a bit of general information that was not covered in most of the UK press. The latter comment is my view. (An informed one when it comes to these matters.)

Word on the street (at HMRC anyway) is that things will be tightened, and many people are in a very grey area when it comes to HMRC 6.

Fair enough. It is useful information and thank you for posting. I'm seeing these events through a political lens rather than a financial one, though. The Tory-led coalition are certainly far from consistent in their policy decisions but I, personally, would find a crack-down on non-residents financially astute but politically strange. Hence my question.

*rolls your eyes back*

Do you disagree with what I'm saying about the wide grey area being to HMRC's advantage in many ways? And that having a clearly defined statutory basis for residency will make gaming the rules easier? (Something it seems to me that Gaines-Cooper tried and failed to do.) That again is my political judgment, would be interesting to hear your take.
typical is offline  
Old Mar 28th 2011, 8:40 am
  #15  
Millhouse is not a meme
 
Millhouse's Avatar
 
Joined: Aug 2009
Location: Disneyland, Dubai
Posts: 14,406
Millhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond reputeMillhouse has a reputation beyond repute
Default Re: UK Budget

I think that expats are more likely than not to be caught by the new rules. UK is skint - they need to raise taxes as best as possible.

They may cut headline taxes to grab the media attention, but they will just cast the net wider.
Millhouse is offline  

Contact Us Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.