23rd February 2008

Tax Rules

Non-dom tax rules to include airport lounges

HM Revenue & Customs (HMRC) could be extending its arm to airport lounges this April, as part of a range of tax reforms that include the controversial clampdown on non-domiciled residents.

HMRC officials told tax advisers last week in an apparent concession to harsh tax reform covering non-domiciled residents, that anyone simply in transit through the UK would not have that day counted towards the 91-day tally that qualifies visitors as UK residents, even if they left one airport and travelled to catch a plane at another. But the sting in the tail is that the reprieve will only apply if no work is done in the UK on the day in question, the Financial Times reports.

Andrew Tailby-Faulkes, an Ernst & Young partner, said: ‘The example they give is of someone landing at Heathrow and then fitting in a meeting before catching a later flight from Gatwick. What if you have a quick meeting with a colleague in Starbucks? Does sending e-mails from a laptop breach the new guidelines? And how will the rule be policed effectively?’

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