Residency test reform delayed



Hopes that British expats would soon have clearer guidelines from HMRC regarding their residency status have been hit by the news that a new statutory residency test has been delayed.

Despite announcing that a consultation period had been finished, and that a new statutory residency test was imminent, HMRC have now stated that the consulting period has been extended so that they can get a greater image of the impact such a test could lead to.

It has been revealed that the new test will now likely be introduced in the 2013 Finance Bill. This decision means that expats who welcomed a degree of clarity will remain confused by the unclear guidelines that exist today.

Speculation is now rife as to what has caused the increased consolation. Some people have suggested that some new rules, such as the proposed penalising of expats with children in UK schools, may actually be open to challenge under the Human Rights Act.

One finance expert said: “A statutory residence test is now urgently needed to help individuals wade through the mire, and this announcement will come as a disappointment to many. In an increasingly global market place, where it is just as easy to work in Switzerland and other low tax jurisdictions as it is the UK, ongoing ambiguity will do little to attract talent and investment to our shores.”