UK: Tax discrimination for being foreign

The UK tax authorities – HMRC – has issued a consultation paper about how they wish to handle “offshore structures” that may, or may not, seek to evade UK tax. What they propose is a requirement to notify (RTN) approach, obliging the party (or parties) behind the “complex offshore arrangements” to inform the HMRC about their scheme (and provide a list of clients using them.), even if it is perfectly legal. If they do not then the onus falls also on the user of the scheme (ie: the contractor) to do so. Once a declaration is made, a special “badge of shame”number will be issued that has to be put on all documents sent to HMRC, Even if the arrangement is legal – and the contractor lives and is taxed abroad – then the provider and/or user could face penal sanctions for not making the declaration. These could amount to a fine equal to 10% of an “underlying asset”. The deadline for responses to these disturbing proposals is February 27th 2017. However, HMRC is unlikely to accept any suggestions unless they seek to evade discrimination and human rights laws even more than they currently propose.

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