Downing Street hasn’t got a clue

Posted on

In February a petition on the domicile rules as they relate to taxation was opened on the 10 Downing Street web site. It said:

"We the undersigned petition the Prime Minister to close the non-domicile loophole that allows foreign nationals to avoid paying UK Income Tax."

In support the petitioner said:

"This loophole allows non-British born residents who make money abroad to avoid tax, as long as their income is not brought into the UK. In many cases it is kept in offshore tax havens. In most countries, overseas residents are subject to the host nation's tax regime. It is unclear whether the recent judgement in the case of Agassi v Robinson (HMRC) might create a precedent to close this loophole."

Now, I admit that this was probably not the best argument that might have been submitted, being tangential at least. It used the Agassi case to seek to prove that the UK tried to tax overseas persons in the UK in some cases, so why not if they lived here? There's a clear logic, if not that well explained in this submission.

There is no logic to the government's response, which is:

Liability to UK tax normally depends on the residence, ordinary residence and domicile status of individuals, not on where they are born. The UK has a special withholding tax regime for visiting performers and it has no read-across to the issue of domicile.

Yet again 10 Downing Street shows it knows nothing about tax. I guess having Brown there would improve on that.