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The Treasury Committee has expressed worries about reforms to tax rules for the non-domiciled.
In its new report on the 2008 Budget, the committee says it is concerned that new legislation focuses on wealthy non-domiciled individuals to the detriment of less affluent people.
'There has been insufficient consideration of the possible impact of tax changes… on the middle and lower income groups of non-domiciled taxpayers,' claims the document.
It also expresses the fear that many non-domiciled taxpayers' could find themselves 'unwittingly in breach' of new rules because of 'the complex nature of the policies on domicile and residence, and the distinction between how liability is incurred for the annual £30,000 charge and the loss of personal tax allowances'.
Finally, the committee adds that it is 'not convinced that sufficient consideration has been given to the possible further burden that the measure will place on HM Revenue & Customs'.
Chairman John McFall said: 'There has… almost no notice taken of the low and middle income groups who will be affected by the changes.
'We have highlighted a serious risk that HMRC will be faced with the problems of potentially millions of foreign workers, either seeking advice or unwittingly in breach of the new law.'
The Treasury Committee's report — which can be read in full here - is more positive in its view of income shifting and the Chancellor's decision in the Budget to delay reforms for 12 months.
Nevertheless, there are concerns 'that this proposed legislation would place an additional tax burden on small businesses'.
The new document recommends 'that the terms of the consultation be widened to constitute a full review of the principles of small business taxation, to ensure that the taxation system rests on practical, workable rules for the small business community'.
