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Taxpayers risk being misled by RDR1, claims tax barrister
The latest Revenue guidance on residence is subpar when compared to its predecessor, according to campaigning tax barrister and writer Keith Gordon.
The information, RDR1, which applies for 2012/13 onwards, has replaced the HMRC6 booklet to reflect legislative changes to the remittance basis and the introduction of the statutory residence test from 2013/14.
“It is a poor substitute for HMRC6, which was itself a poor substitute for IR20”, said Gordon. He warned that the new guidance “goes so far out of its way to avoid making any promises that a taxpayer could rely on hat it puts caveats on propositions that are actually provided for by the statute”.
RDR1 also replicates legislation so closely that it repeats words that are wholly unnecessary, creating confusion and uncertainty, claimed Gordon, citing the advice that “you are likely to be treated as not resident in the UK for income tax or capital gains tax purposes in the tax year if… you did not spend more than 15 days in the UK and were resident in the UK in one or more of the three previous tax years”.
Gordon, author of Residence: the Definition in Practice, said, “The words ‘likely to be’ are unhelpful, and the statement would be more accurate if they were simply omitted. Furthermore, the words ‘and were resident in the UK in one or more of the three previous tax years’ add nothing to the guidance and can also be omitted.
“The entire statement should be qualified by a note that ‘days’ actually means ‘nights’ (or at least it usually does). Unfortunately, this rather basic definition is wholly absent from the text of the booklet although eagle-eyed readers who already know the rules might be able to spot some clues to this rule,” added Gordon, who practises from Atlas Tax Chambers.
“RDR1 will be an inadequate guide for anyone wishing to determine their residence status, whereas anyone who relies on it will risk being misled.”
