Should I Stay or Should I Go?

The UK is becoming an increasingly expensive place to live and work.  With changes such as:

• ·       A new 50% rate of income tax becoming effective from 6 April 2010
• ·       Restrictions to both the personal allowance and pension relief
• ·       Increases in taxation of company cars
• ·       The new UK tax rules on residence and domicile
• ·       Implementation of the new Companies Act

As a result of these changes many high net worth individuals and companies are leaving the UK.  One of the most high profile companies being McDonald’s who, after 25 years in the UK, have relocated their European headquarters to Switzerland. 

So what does that mean to the rest of us who are left behind?  Well, like any business in this economic downturn, the Government has two options; they must reduce spending and raise revenues.  This September they announced a review of public spending with a view to cutting costs.  To raise revenues, initiatives have been implemented to ensure that no stone is left unturned in collecting tax.

As a result, as is so often the case, it’s the small businesses and hardworking employees that are the focus of their attention.  In particular HM Revenue & Customs (HMRC) have issued a document entitled “False Self Employment” which serves to further challenge the status of the self-employed person in the construction industry.  The objective being to reclassify more individuals as employees and thus making them ineligible to claim the usual business expenses and create an additional national insurance liability for the deemed employer.      

HMRC have also revisited their voluntary disclosure scheme for UK residents that may have undeclared overseas bank accounts.  The new scheme is called the New Disclosure Opportunity and taxpayers have until 30 November 2009 to notify HMRC that they wish to make a voluntary disclosure.  The banks have already provided HMRC with details of individuals with overseas accounts.   So, if you have an overseas account that has not been disclosed, it is important that you call HMRC before they call you!

Finally, changes to HMRC powers and a new penalty regime make it essential that taxpayers review their affairs on a regular basis, consider any tax saving opportunities and are compliant with all aspects of business and personal tax.

Martin Macario

You can contact Macario Lewin by:

info@macariolewin.com

Swansea 01792 473992

Chepstow 01291 621588