Until 2001 all UK taxpayers had their family allowace included in their tax code but then the Labour government decided that even though those people who's earning still arose in the UK, eg retirement pensions, savings, investments, property and those working from abroad via the internet should still pay the tax they would no longer get tax allowances.  Child benefit was also withdrawn from people living abroad and paying UK deductions.

The internet makes it possible for many people whos work is in the UK to do it from a terminal anywhere in the World.

As it is income tax all income arising in the UK is taxed in the UK.

But the law on allowances is based on where you live, not where the money comes from.

Many people are affected by this and many more will be if they work from a foreign desk or go to live abroad.

Why is this idea important?

  1. Restore fairness so that everyone paying the same rate of UK tax gets the same rate of UK tax allowance.
  2. To encourage expats not to change their domicile and residence to pay their tax somewhere else.

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