Anniversaries
Steve Wade
Partner - PAS Tax at EY | Chartered Tax Advisor | Expatriate and Employment Taxes
Thank you to everyone who has contacted me about the anniversary of my return to EY.
Today is another anniversary albeit one that is not as happy. A year ago as the Expat Forum Co-Chair I wrote to HMRC outlining a long list of tax and NIC issues in respect of Expats that had been outstanding with HMRC. The genesis of the letter was that HMRC had cancelled an Expat Forum meeting due to lack of progress and that cancellation frustrated forum members.
Some small process has been made. Minutes were taking a long time to be published. The minutes of the Expat Forum meeting of 17 April 2024 are on the HMRC website and those minutes state:
"HMRC advised that, if members can recall, the Forum co-chair sent a letter to HMRC in Aug 2023 year which received widespread support from other forum members, due to it highlighting the problems a lot of forum members were facing in recent times. The letter also raised potential solutions and the letter tied everything together that members were still experiencing. It nicely dovetailed with the Globally Mobile Project that HMRC had set up to look at such issues arising from the forum"
and:
"As stated, re the Globally Mobile Project, HMRC want to give assurances that items covered are being worked on internally and all the different recommended solutions have been put forward for decision"
Unfortunately, we have yet to see significant benefits of the review in practice.
The minutes of the Expat Forum meeting of 8 November 2023 refer to the Expat Forum Q&A log and regarding the Q&A log state:
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"We will ensure there is a signpost on GOV.UK"
A minor point but there still is not a signpost. I can appreciate it wouldn't be a priority for HMRC given the length of time issues have been outstanding. For example, Q36 of the Expat Forum Q &A has been outstanding for so long it is just referred to by members as the Q36 issue. The question commences:
"At the Forum meeting on 28 February 2018 a question was raised about the application of the UK:UAE double tax treaty to employment income received when the treaty is in force but that is sourced, for treaty purposes, to the period before the treaty came into force. HMRC promised to provide an answer to this question in writing so I am including it here so it can be captured on the issues log and to add the following related questions."
The answer remains:
"The previous answer has been removed. These issues are currently being clarified, and a revised answer will be forwarded to forum members as soon as possible"
I hope I am not writing about the anniversary of Q36 on 28 February 2025!
NB The reference to the one treaty above may seem very esoteric but the answer impacts the interpretation of all UK tax treaties.
Partner - PAS Tax at EY | Chartered Tax Advisor | Expatriate and Employment Taxes
8moThank you all for your comments. I picked one issue because it had a straight forward date to reference as an illustration of the time taken to get answers. As you have pointed out there could have been a number of issues chosen. I note Aparna's observations about dialogue and unintended consequences. I think this will be very important regarding the coming non domicile changes. If there is to be a simplified regime for remittances of pre change income, we need to agree the meaning of the prior rules or else we will have unintended consequences.
Independent Law Practice Professional
8moThanks Steve. In the past, dialogue with professional bodies/ tax specialists over changes to be introduced helped to ensure that possible unintended consequences were identified and significant areas of concern were addressed, and where possible, clarified. Let us hope that HMRC continue to engage in future, for example, in ironing out potential infelicities in the much-anticipated changes to CGT, school fees and the non dom regime.
Not surprising. HMRC only seem to be effective when chasing funds they deem owed to them.
Consultant at Blick Rothenberg
8moThe only bright side to this is that some small progress is better than none. On the question of promised guidance on tax treaties/lump-sum payments/'Saving Clause' in the US/UK Tax Treaty, HMRC have now given new meaning to something being "imminent". I thought the boundaries on that one had been stretched to the limit by my former MP who had still not resigned two months after stating in public that such an act was imminent.
Partner Rawlinson & Hunter
8moI have no doubt that internally HMRC (like a number of Revenue Authorities I know) are struggling with numerous staffing and process issues. Some though of their own making, some based on a desire that when far from clear or certain issues under the law must in their eyes be contorted into whatever gives the highest yield. Political pressure put us here such the HMRC cannot be seen to “make deals”. But you could instead of Q36 referenced FTC calculations, pension lump sums, NIC apportionment, split payrolls……. No doubt all hands there are now into consultation and the budget changes. Perhaps after that the older issues will be resolved.