UK Accountancy Firm Warns On Personal Tax Allowance Proposals

By Fiona Moore, for 30 July, 2014

A UK accountancy firm has warned that proposals to limit the personal tax allowance for non-UK residents may leave British employees who are seconded abroad "significantly worse off." It said expats, including retirees, may have to rearrange their financial affairs to avoid losing out.

James Hender, who is Head of the Private Wealth Group at Saffery Champness, explained that changes to the rules will mean companies and employees will have to think harder about how, when, and where salaries and benefits should be paid to staff based abroad. He also suggested that in some cases staff will have to be given pay rises to compensate for the loss of the allowance.

Hender further observed that companies' ability to send staff where they are most needed may be impeded, counter to the growing need for globally mobile workforces.

British taxpayers can earn up to GBP10,000 (USD17,000) without paying tax, and this figure is set to rise to GBP10,500 from next year. However, the Government is consulting on whether this allowance should continue to be available to non-residents. According to the Government, the UK grants a Personal Allowance to more non-residents than many other tax jurisdictions, including the USA, Australia, Canada, and most of the European Union.

The Government argues that, under current arrangements, the UK tax liability of non-residents often does not reflect the extent of their economic links to the UK, and said the impact of the change will depend on a person's circumstances.

Tags: Finance | Tax | Tax Reform | Individual Income Tax | Expats | Pensions | Personal Finance | Working Abroad | Work | Working Abroad | Pensions | Working Abroad |


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