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Get some tax from expats

Comment 21st July 2010

If people work overseas but want to live in the UK it would be far fairer to charge a fraction of the tax they would have paid if earning in the UK based on how long they spend in the UK per year.

Why does this matter?

At present if an expat spends less than an average of 91 days per year in the UK they pay no tax, and merchant seamen can qualify for a 100% discount if they spend less than 183 days per year at home in the UK (with other very demanding restrictions). 

The way things stand now HM Revenue and Customs can, if they choose devote their time to investigating people who claim to qualify for the above at considerable cost and use of time. If however HMRC could use data obtained from UK Borders Agency passport data they would be easily able to tell how much time people have spent in the UK and charge a proportional fraction of the tax on their earnings which would have been liable if in the UK.

This would mean that HM Govt could get a significant fraction of the tax revenue which is currently not paid by expats who are often on relatively high salaries. Surely a fraction of a large easily calculated sum would be better than receiving nothing from people who can spend up to a quarter of a year in the UK getting the same privileges as people who pay 100% of their tax?

Also, many people who currently qualify for expat tax status may be willing to pay such a fractionally proportional amount of tax in exchange for being able to spend more time at home, and taking the idea to it's logical conclusion, if the scheme applied to all taxpayers they would be able to claim back a portion of their income tax for when on holiday abroad or on overseas business trips – this would win votes, boost the travel industry, and encourage businessmen and women to develop international trade. Indeed, it might also facilitate getting a considerable sum from very wealthy people who currently are high profile tax exiles, maybe another vote winner.

The main advantage of the scheme would be the ease of HMRC calculating the tax due with information which is already stored by the government as our passports are scanned whenever we leave and return to the UK.

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