There are cash benefits in applying for non resident tax status. Despite the stiff new rules, qualification
is still worthwhile, says Hannah Beecham
As an expat, you might be forgiven for thinking that once you’ve dusted the UK’s soil from the soles of your shoes, HMRC – aka the taxman – is one pen pal you never need correspond with again. Wrong! An ongoing dialogue is a legal requirement, but expats can take heart that the task of seeking official confirmation of your newly acquired resident-status will be to your benefit. And we’re talking cash benefit here so it will, literally, pay to pay attention.
Given that we know there is a rise in the number of Brits flocking abroad it is surprising to learn that there’s been a significant fall in the number of expats applying for UK non-resident tax status. Latest figures from HMRC show that in 2008/09 130,000 people registered compliance, whereas in the previous year the total was 148,000.
Some advisers are worried that the 12% decrease reflects the difficulties experienced by expats in meeting the changing criteria. Over the course of the last year, HMRC has imposed new limitations on the factors governing non-resident tax status but, to date, has not issued a definitive rule book. This has left both new expats, and those who’ve already qualified as non-resident, confused about their current status.
Ronnie Ludwig from chartered accountants, Saffery Champness, explains that for an expat to justify his or her non-resident tax status it’s no longer just the number of days spent back in the UK that are taken into account, but additional factors such as ‘lifestyle’. And so you must expect to be questioned about any occupation of a UK home (either by yourself, your spouse or children), what UK clubs you belong to, whether a UK bank account is the hub of your economic activities, and whether you use a UK credit card.
Read more in the November issue of Living Abroad Magazine
