Tax regulations on non-doms are ludicrous

by Kate Pritchard - Tuesday, 16th September 2008 -

Although foreign firms continue to set up business on these shores, the British government seems hell bent on putting them off. "The manner in which the government has introduced tax regulations for non-domiciled residents in the UK has been utterly catastrophic," says Freddie Huxtable, a tax partner at Vantis.

"Just before the Finance Bill was published on 21 July this year, the government announced that it would be reviewing the provisions – surely tantamount to an admission that the new law is flawed," says Huxtable.

He believes that corporate businesses are now considering leaving the UK. "This is not necessarily due to the £30,000 tax charge for non-domiciles or the fact that UK companies are taxed on a worldwide basis – rather, businesses and their owners have lost confidence in the powers that be, to deliver a fair and thoroughly considered tax system.

"The government does not seem to appreciate that non-domiciled residents are mobile – they do not have to stand for knee-jerk decisions about the way they are taxed and they can and will move their businesses elsewhere. Indeed, other jurisdictions offer more competitive corporate tax regimes."

Huxtable reckons the UK government must take a new approach to the way it announces changes to the tax system. Trumpeting new regulations on Budget Day is "bad practice", he says.

Picture source

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