HMRC ‘changed policy to catch non-residents’

Gaines-Cooper returned to the Court of Appeal yesterday for the judicial review hearing after being adjourned for the summer. The residence case which is being heard together with Davies and anor is concerned with whether HMRC failed to apply correctly the tests in IR20 writes Rachael Arning.

David Goldberg QC counsel for Messrs Davies and James began by repeating his submissions of 30 June. The main thrust of his argument was that HMRC had introduced an unannounced change of practice in the way in which they applied the tests in paragraphs 2.7 to 2.9 of IR20 which look at whether the taxpayer had left the UK permanently or definitely.

HMRC are alleging that under those paragraphs a taxpayer would need to demonstrate a ‘clean break’ of any ties with the UK to establish non-resident status. Mr Goldberg said that this was a change...