Those wealthy residents of Scotland who are toying with the idea of crossing the border to England (via changing the address of their "main" home) in order to avoid paying higher Scottish income taxes (due to commence April 2016), may need to think again.
HMRC has disclosed that it plans to use “external data” to identify Scots who change their addresses and identify “high risk cases such as mobile employees and taxpayers with high incomes.”
In a submission to Holyrood’s finance committee, HMRC also disclosed
that it has worked with SNP ministers about getting address information
from NHS Scotland records.
HMRC said it believes that 98% of people it has listed as being
Scottish taxpayers are “likely” to have been correctly identified as
liable for the new rate of income tax.
Needless to say, the idea that HMRC are looking for wealthy Scots has not gone down well North of the Border. Eben Wilson, director of low-tax campaign group Taxpayer Scotland, is quoted by the Telegraph:
ATT has warned that workers with homes on both sides of the Border could register to vote in England to avoid paying higher taxes in Scotland.
HMRC will write to taxpayers in December informing them they will be treated like a Scottish taxpayer and advising them of how to report a change of address. Separately, it will write to those who appear on the electoral register in Scotland but have an address elsewhere in the UK.
The submission said the cost to the taxpayer of administering the new system will be between £2 million and £2.5 million next year if MSPs choose to keep income tax rates the same as the rest of the UK.
However, this cost increases to between £5.5 million and £6 million if they elect to have a higher or lower rate.
What could possibly go wrong?
Needless to say, the idea that HMRC are looking for wealthy Scots has not gone down well North of the Border. Eben Wilson, director of low-tax campaign group Taxpayer Scotland, is quoted by the Telegraph:
“We want transparency on what HMRC is doing as the idea that they are trawling for wealthy people to trap them is appalling – we need more of them in Scotland.”Association of Taxation Technicians (ATT) has criticised the HMRC guidelines of who will be a Scottish taxpayer as unclear, inconsistent and “extremely subjective”.
ATT has warned that workers with homes on both sides of the Border could register to vote in England to avoid paying higher taxes in Scotland.
HMRC will write to taxpayers in December informing them they will be treated like a Scottish taxpayer and advising them of how to report a change of address. Separately, it will write to those who appear on the electoral register in Scotland but have an address elsewhere in the UK.
“If the Scottish rates diverge from the rates which apply elsewhere in the UK, there will be an incentive for taxpayers to claim that they live on one side of the border, when they live on the other.It plans to cross-reference the addresses given by taxpayers with those provided by employers and the Department for Work and Pensions.
HMRC will use external data to highlight changes of address, and identify high risk cases such as mobile employees and taxpayers with high incomes and will undertake appropriate compliance activity to address any risks that arise.”
The submission said the cost to the taxpayer of administering the new system will be between £2 million and £2.5 million next year if MSPs choose to keep income tax rates the same as the rest of the UK.
However, this cost increases to between £5.5 million and £6 million if they elect to have a higher or lower rate.
What could possibly go wrong?
Tax does have to be taxing.
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Its about time someone went after all the owners of those fancy yachts and motorboats moored up in marinas around the West Coast. Those things can burn over a grand's worth of diesel in a weekend.
ReplyDeleteI recall as a Tax Officer in Belfast in the 70s going through my Concards (remember them folks?) as part of a UK wide exercise to identify and list Scottish residents who might be affected if Scottish Variable Rate was ever invoked.
ReplyDelete