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Repeal the 91 day tax law

Comment 1st July 2010

The UK has in a place, with a great many foreign nations inc EU, a 'double taxation agreement' of 183 days. This effectively means that if you are in the UK for 183 days or more then you pay UK income tax and vice versa – and do not have to pay income tax  in both countries.

The last government introduced the 91 day tax rule, which means that if you are in the UK for 91 days or more per year, averaged over 4 years, you are liable for UK income tax, irespective of whether you have paid income tax in another country, based on the 183 day rule.

So for me this means that as I work for a european based company and that as I am in my country of work for more than 183 days per year, that I pay my Income tax in the country of employment (of which is the intention of the 183 day rule). However I cannot reside in the UK for my days off as this would be more than the 91 days and then I would have to pay income tax again in the UK.

 

Why does this matter?

This has meant moving my self and my family abroad, whereas the spirit of the agreement was to ensure that income tax was paid in the country of work. 

This law sets a double standard – I can live in the UK, pay UK income tax but work abroad – but cannot live abroad, pay taxes abroad and work in the UK. It also prevents UK residents from seeking work elsewhere unless they are prepared to relocate.

In my opinion, this 91 day rule means that people like us have to leave the UK. Therefore we now pay nothing to the UK purse. Surely it would be better to allow us to work abroad and at least contribute to the indirect taxes and indeed the Income tax from my spouse.

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