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UK tax man ups take from high income foreign workers
| Published: | 22 Oct at 6 PM |
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Data analysed by law firm Pinsent Mason shows that Her Majesty’s Revenue and Customs’ compliance investigation into high-earning foreigners working in the UK netted a 23 per cent increase in tax take since 2010.
The total additional yield received as a result of compliance investigations in 2011-2012 was £117.2 million as against 2010-2011’s figure of £110.8 million and 2009-2010’s £94.9 million. According to Pinsent Mason’s director, Ray McCann, HMRC is cracking down on foreign expats working for hedge funds and investment banks.
Describing the expat sector as ‘low-hanging fruit’, McCann explained that it’s being targeted by government tax inspectors as it traditionally gives high yields. He added that the increased take was interesting following the recession, the credit crunch and the fact that City bonuses have been slashed and investment banking revenues lowered.
McCann believes that HRMC will have needed to work much harder than is normal in order to pull in the increases, adding that expat workers traditionally have difficulties navigating the minefield of UK tax laws. Even if funds are not paid into or come into the UK, full compliance can be tricky as property and investments in the country of origin as well as movement of funds between countries can cause issues resulting in UK tax liabilities.
The tax law firm considers that times may get even tougher as HMRC scrutinises the City even more rigorously, and is warning that expats working in financial service arms can expect to come under investigation for tax avoidance. Tax planning schemes are the taxman’s pet hate at the present time, as are employer-financed retirement packages, with both expected to attract aggressive challenges.
The total additional yield received as a result of compliance investigations in 2011-2012 was £117.2 million as against 2010-2011’s figure of £110.8 million and 2009-2010’s £94.9 million. According to Pinsent Mason’s director, Ray McCann, HMRC is cracking down on foreign expats working for hedge funds and investment banks.
Describing the expat sector as ‘low-hanging fruit’, McCann explained that it’s being targeted by government tax inspectors as it traditionally gives high yields. He added that the increased take was interesting following the recession, the credit crunch and the fact that City bonuses have been slashed and investment banking revenues lowered.
McCann believes that HRMC will have needed to work much harder than is normal in order to pull in the increases, adding that expat workers traditionally have difficulties navigating the minefield of UK tax laws. Even if funds are not paid into or come into the UK, full compliance can be tricky as property and investments in the country of origin as well as movement of funds between countries can cause issues resulting in UK tax liabilities.
The tax law firm considers that times may get even tougher as HMRC scrutinises the City even more rigorously, and is warning that expats working in financial service arms can expect to come under investigation for tax avoidance. Tax planning schemes are the taxman’s pet hate at the present time, as are employer-financed retirement packages, with both expected to attract aggressive challenges.
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