Tax Institute calls for statutory UK residence test
21-Dec-2007Business travellers making as little as four overnight visits to the UK per month could find themselves tax-resident under proposals from the UK government, the Chartered Institute of Taxation warned.
The UK Treasury is currently looking to change rules that allow people to work in the UK while residing in tax havens abroad. It expects about 17,000 non-residents to be brought into the UK tax net, raising an additional £125 million over the next three years.
Existing UK rules make a visitor resident if they spend at least 183 days in the UK in any particular year, or an average of more than 90 days over four years. The proposed new regime, which is to be introduced in April, will include dates of arrival and departure as days in the UK.
"This will have a genuine and really serious impact on London and other major UK cities as places to do business," said the Institute in a submission to the UK Treasury.
The institute is calling for the introduction of a "comprehensive statutory residence test". This should include days of arrival and departure, but instead of restricting time in the UK to 90 days, it should allow visitors to spend 120 days in the UK before they became resident.
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