Tax probes into wealthy foreigners stepped up
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The UK tax authority has significantly increased the amount of extra money it obtains from highly paid foreign professionals, having stepped up interrogation of their tax affairs.
In the 2013-14 tax year, HM Revenue & Customs generated £154m from investigations into high-income workers who are non-UK citizens, according to a freedom of information request by law firm Pinsent Masons. This represents a 27 per cent increase on the previous year.
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The authority’s “expatriate” team – officially known as the “personal tax international” group – deals with individuals working in the UK who have complex and substantial remuneration structures.
Ray McCann, a partner at Pinsent Masons, said that a lack of familiarity with UK tax rules, coupled with overseas income and tax liabilities, can make it easy for expatriate workers to make mistakes on their tax returns.
“Investment bankers and other well-paid City staff have always been a prime target for HMRC because they tend to bring in significant compliance yield,” said Mr McCann. “With the increased pressure to try and boost its revenue, it comes as no surprise that HMRC is continuing to target wealthy expats.”
In a statement, HMRC attributed the increase in tax yield by the expatriate team to “effective investigation of residence, and domicile status of the individuals seconded to the UK, ensuring earnings taxable in the UK are properly accounted for.”
