As the Observer notes this morning:
The number of people claiming non-domicile tax status has nearly doubled in three years, fuelling fears that Britain is becoming the world's first onshore tax haven.
Ed Balls, economic secretary to the Treasury, confirmed in a written answer to a parliamentary question that 112,000 individuals indicated non-domiciled tax status through their self-assessment returns in the year to April 2005. This is a 74 per cent increase on 2002.
The inequity caused by this rule is increasing fast. The time to stop it is now.
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Hi Richard,
I also read that article.
The Treasury apparently has no idea how much tax is not being paid because of people abusing the domicile rules. Ouch!
I’m also intrigued to note why the domicile rules were introduced – so that British citizens working in the then colonies didn’t have to pay tax twice.
But the colonies are mostly long gone. So if it’s no longer needed, why hasn’t the loophole been closed?
M
M
I think it’s true that the Revenue don’t know how much the domicile rules are costing. What annoys me is that they are apparently quite unwilling to research the issue to remedy this deficiency. That’s indication of a lack of willing to address this issue.
The reason for the introduction of the rules is also telling – the reason for their introduction was (partly) to prevent double taxation. But they’re now being exploited to allow double non-taxation. That’s quite different.
I agree with you – it’s time for these rules to go.
Richard
Hi Richard,
That is annoying. If more tax funds are needed for the Treasury then surely the following people should be top of the list to provide those funds:
a) those who can afford it, and
b) those who don’t already pay their fair share of tax.
Would it be true to say that the super-rich exploiters of the non-domicile rules fall into both those categories?
So would the Revenue’s time not be better spent finding out how much tax could be earned if the domicile loophole were closed, than chasing after and hassling honest small business owners?
I suspect I’m preaching to the converted here 🙂
M
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