Commenting on moves to reduce tax avoidance by individuals employed in the UK and other ‘low tax’ jurisdictions Marc Burrows, UK Head of International Executive Services at KPMG, says:
“Proposals to reduce tax avoidance by individuals employed across more than one geography have thrown up some surprising results."
“With today’s announcement, UK resident employees who have both UK and an offshore employment contracts in a ‘low tax’ country, can expect to pay the UK rate of tax on all of their employment income. Employees whose offshore contract is in a country with a “comparable” tax regime to the UK, will also benefit from paying the rate of tax applicable in that country, which can be up to 35% less than the UK rate of tax."
“Although we fully expected low tax countries such as Hong Kong, Singapore or the Channel Islands to be affected by the Chancellor’s announcement, it seems that countries where the tax regime is perceived as comparable to the UK, will also be caught. Some EU States and parts of Canada now appear to fall foul of the changes.”
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Chancellor’s Budget 2014
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.