Monday, September 13, 2004

Expatriates fear Brown plans to charge them full tax rate By Toby Helm, Chief Political Correspondent(Filed: 10/08/2004)

(cut and pasted from the Telegraph website)

Two million Britons living abroad could face higher taxes after the Treasury refused to rule out changes in the regime for non-resident nationals.
Expatriates fear it could impose an American-style system under which they would pay the same income tax total as if they remained in Britain.
Non-residents are not taxed by Britain on income arising from work carried out wholly overseas but are subject to the tax regimes of the country where they live.
Americans living abroad have to make up the difference if local taxes are less than they would pay at home.
Liam Fox, the Conservative Party chairman, wrote to Gordon Brown, the Chancellor, about his plans after returning from a tour of Hong Kong, Dubai and South Africa during which Britons voiced their fears about persistent rumours of tax rises.
Dr Fox also believes the Treasury may reduce from 90 to 30 the number of days non-residents can spend in this country before becoming liable to tax. Exemptions from capital gains tax are also said to be under threat.
The Treasury did not rule out changes and said the issue of non-residents' tax arrangements had been under review for several years. Officials insisted, however, that they did not believe big changes were imminent.
That view was echoed by independent tax experts who said the changes would be more about modernisation than punitive change. A Treasury spokesman said: "Tax policy is made in Budgets not in response to Liam Fox's overseas visits."
In his pre-Budget report last December, Mr Brown said the whole issue was "complex and far-reaching". The Treasury would consider reform after further consultation.
Dr Fox said: "It is clear from the Treasury's lack of a denial that it is looking at new ways to milk British taxpayers whether they live in the United Kingdom or not.
"This will only add to the impression that Gordon Brown is identifying tax rises should Labour win a third term. No taxpayer will be safe whether they live in Britain or not."
A Labour spokesman accused him of whipping up concerns and claimed the real purpose of his trip had been to raise money from rich businessmen for Tory coffers.
"Liam Fox is like a travelling salesman hawking Tory Party policy round the Far East to the highest bidder."In his letter to Mr Brown, Mr Fox said the rumoured reforms would affect the willingness of people to move abroad to work for British companies exporting overseas.


I do realise that this is a very right-wing paper and they're probably playing the story up to try to drum up a few expat votes for the next election, but even so it's alarming.

I don't care about reducing the number of days from 90 to 30 before you become eligible for tax, in fact I'd like them to reduce it further so I never need to go again, but the tax thing is definitely scary. It doesn't sound like anything is imminent but if this does turn out to be true then it's time to consider another passport I think. Fortunately there seem to lots of them out there. I shall try the following sporting refrains for size and see which fits - Allez les bleus, forza azzuri, nkosi sikelele Africa malup hakanyiswu phondolwayo (hmmm - that looks a bit tricky. Might have to stick with - bokke, bokke, bokke...), waltzing matilda waltzing matilda, who'll come a-waltzing matilda with me... in fact pretty much anything except ka mate ka mate ka ora ka ora. If I want to be cold and wet I might as well stay British, no need to become a Kiwi.