PWC getting worried about domicile

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I note that this week's tax newsletter from PWC UK has a feature entitled "UK's non-domiciled regime under fire".

Too true, although there's nothing they report that's not been noted here. They do however note that:

The Tax Justice Network, a group that campaigns against tax havens, argues that the domicile rules amount to "state aid" that helps employers to recruit non-UK rather than UK staff by lowering payroll costs

Curiously they say this after noting the the EU membership agreements do not, in their opinion, give Italy an opportunity to challenge the UK domicile rule, as they would like. I think there's good reason for them doing that. What they are hinting at is that this is the way Europe could object to the domicile rule. It is. That's why we have pointed this out.

I put it another way in the Heckler's debate, when I said:

In fact, the whole process of giving a tax subsidy to promote economy activity, which is exactly what the domicile policy really is, is part of 1960's thinking when we did it to support ailing industries and to preserve the jobs of UK workers. .. Now we're using tax subsidies to support the financial services industry, the already over inflated UK housing market and to support the swankiest retail stores in the country.

State subsidy can be illegal under EU law. I hope Italy and others make the connection and raise the argument. It's time they did.