BritishAmerican Business Invites Comments from Members on UK Government Consultations

In June 2011 HM Treasury issued consultations on proposed reforms of the taxation of non-domiciled individuals and on the statutory definition of tax residence. The UK Border Agency has also launched a consultation on proposed changes to qualifications for UK settlement by Tier 1 and Tier 2 visa holders.

All three of these issues are of interest to BritishAmerican Business, and we have made past representations on behalf of our members on both the non-doms issue and the cap on non-EU economic migration.

Our members have seen these issues as undermining the attractiveness of the UK as a desirable location to conduct business. We are therefore now seeking you and/or your company’s input and opinions on how you see these three issues affecting your business so that we can make formal representations on behalf of our members to HM Treasury and the UK Border Agency in advance of the closing date for submissions (September 9).

Further information on each of the consultations, including links to download the consultation paper and survey can be found below:

HM Treasury Consultations

1) Reform of the taxation of non-domiciled individuals

In the March 2011 Budget, the Government announced that it would reform the taxation of non-domiciled individuals by:

• increasing the existing £30,000 annual charge to £50,000 for non-domiciles who claim the beneficial tax regime (“remittance basis”) in a tax year and who have been UK resident for 12 or more of the 14 years prior to the year of claim;
• enabling non-domiciles to remit overseas income and capital gains tax-free to the UK for the purpose of commercial investment in UK businesses; and
• making technical simplifications to some aspects of the current remittance basis rules to remove undue administrative burdens.

The consultation is seeking views on the detailed policy design of the changes announced and would welcome views from individuals, advisors, businesses and representative bodies who are affected by, or have an interest in, the rules on non-domicile taxation

For more information please visit HM Treasury’s website at

2) Statutory definition of tax residence

In the Budget the Government also announced that it would introduce a statutory definition of tax residence to create clear rules that provide greater certainty for taxpayers and are simple to use.

This consultation proposes new statutory rules to define tax residence and seeks views on their design and implementation. The tax residence of the vast majority of individuals will not be affected by the introduction of the new statutory definition. As part of this consultation, the Government is also seeking views on options to reform the concept of ordinary residence, which currently lacks a statutory definition.

This consultation will only cover the issue of tax residence in the UK for individuals and will not cover the residence of companies.

HM Revenue & Customs is considering the possibility of providing an interactive online tool to enable individuals to self assess their residence status when the new statutory definition is introduced. A prototype of this tool is available below and interested parties are invited to make use of this to assess how a statutory test could operate in practice.

For more information please visit

UK Border Agency Consultation

1) Employment related settlement, Tier 5 and overseas domestic workers
On 9 June, the government announced its consultation on work routes leading to settlement (and other issues) and said that it would commission the MAC to consider the economic impact of restricting or removing settlement rights under Tiers 1 and 2 of the points-based system.

The question that the government has asked the MAC to consider is as follows:

What would be the economic effects of restricting or removing settlement rights in Tiers 1 and 2 and/or restricting leave to a maximum of 5 years?

If settlement were to be restricted:

 Which economic criteria could be used to identify the most economically important Tier 2 migrants for settlement?
 Would there be merit in making allowance for specific skills or occupations as part of the assessment criteria, based on factors including strategic economic importance, provision of key public services, and ensuring that the UK attracts the top global talent?

For more information please visit UKBA’s website at

Please send your views to Sarah Scurr, Communications & Policy Manager at BritishAmerican Business, at no later than 15 August 2011.

(Please note that when we submit our views to government, we do so on behalf of our whole membership, and never identify individual companies, or ascribe particular views to them).