Non-Dom Own Goal Creates Headache For Tax Authorities, PKF States

by Jason Gorringe, Tax-News.com, London

23 May 2008

The ability of HM Revenue & Customs (HMRC) to cope with the consequences of the new non-domicile legislation in the Budget has been questioned by tax experts at accountanting firm PKF, who argue that the move could cause administrative chaos.

Partner Philip Fisher has pointed out in an open letter to HMRC Acting Chairman Dave Hartnett this week that up to one million people, including temporary economic migrants from the EU, first and second generation immigrants, and city secondees will be affected.

They will have to complete forms detailing their worldwide income and/or agree to pay additional tax, which will then have to be collected.

Mr Fisher explained that:

“While media focus has been on super rich non-doms, the Treasury appears to have forgotten the mass of people who will have to make complicated returns for tiny sums of tax."

“With morale and staffing levels at HMRC at an all time low, their capacity to process the paperwork and collect the tax must be in doubt. Unless they drop the plan, the only sensible thing for the Government to do is to impose more generous cash or time limits, otherwise there could be gridlock at HMRC," he concluded.

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