CIOT: Statutory Residence Test ‘important for the UK’
The long-awaited Statutory Residence Test (SRT) draws a step closer with the publication of revised legislation today. The UK is on track for a modernised system of deciding tax residence which will operate from April 2013.
The SRT legislation in the draft Finance Bill, published today, show some useful changes from the version published earlier in the year, reflecting the continuing dialogue between business, the tax profession, HM Treasury and HM Revenue & Customs. The Chartered Institute of Taxation (CIOT) has been closely involved in the consultative process and welcomes the progress made in resolving remaining areas of uncertainty.
Commenting, Colin Ben-Nathan, chair of the CIOT’s Employment Taxes committee, said:
“It has been a long hard road to get to a proper statutory test for UK residence but we are almost there. This is important for the UK: we are an open economy that depends on trade and international movement so we need to have clear rules over when people fall – or don’t fall – into our tax net.
“It is on the surface disappointing that the legislation has grown ever longer but this is a case where longer is better. We need the rules to bring certainty to as many taxpayers as possible and that means spelling out the rules in the law. It is good to see that a number of our concerns – for example around the meaning of ‘home’ – have been addressed, though some remain and we still need guidance in a few areas.
“We also welcome the commitment to press ahead with the abolition of ordinary residence which will be welcome simplification and streamlining. Retaining the overseas workday relief in defined situations brings a proper balance to matters.”
Notes to editors
1. The Statutory Residence Test has been developed over a number of years through extensive discussions between business, tax advisers and the tax authorities, culminating in a consultation document and draft legislation published in June 2012. For more details see http://www.hm-treasury.gov.uk/consult_statutory_residence_test.htm
2. The CIOT’s response to the June consultation can be read at: http://www.tax.org.uk/tax-policy/public-submissions/2012/SRT_SoR_CIOT
3. The Chartered Institute of Taxation (CIOT) is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.
The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.
The CIOT’s 16,500 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
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George Crozier
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