CIOT rejects plan to remove personal allowance for non-residents


The Chartered Institute of Taxation (CIOT) is calling on the government to drop the plans to restrict non-residents entitlement to the UK personal allowance

The comments were made in CIOT's response to the Treasury’s consultation on restricting non-residents entitlement to the UK personal allowance.

The consultation explores whether the UK should take steps to restrict non-residents’ entitlement to the personal allowance; the options for doing so and the affects of such restrictions.

In its response, the CIOT says it does not think that the current system of entitlement to personal allowance for non-residents should be changed, stating that doing so would be incompatible with the consultation’s high level objectives of simplicity and competitiveness.

The CIOT is particularly concerned that the increased complexity risks making the UK less internationally competitive and therefore a less attractive place to do business and work.

In the response, CIOT expresses ‘concerns that it is unfair that individuals without strong economic connections to the UK will continue to benefit from the highest personal allowance in the G20, but this is just an automatic consequence of the government’s policy decision to increase the personal allowance.

‘We do not think it is a reason, on its own, to change the current system. We would urge the government to think very carefully before it replaces the current well understood system with a complicated new restriction.’

It has already received feedback that potential clients of its members have decided against moving to the UK ‘because of the perception that the UK tax regime is continually changing’.

It also has strong reservations about the proposals to involve employers and other PAYE scheme operators in the process of determining an employee’s residence status, saying that tests to determine residency are complex and professional advice is nearly always recommended.

CIOT was also highly critical of the consultation process and the change to the feedback deadline which was not well publicised, leading to confusion on the part of stakeholders. It said that the Treasury should follow the standard consultation process.

'We would like to express our frustration with the way this consultation has been published on

'Unlike most HMRC consultation documents it was not published as a pdf document but in html format as a web page. As a result there were no page numbers, and the additional absence of paragraph numbering has made the referencing of our response to the document a challenging exercise at times.

Also the change in the consultation deadline was not well publicised.

'Since the document was not a PDF it was not so easy to refer to on the web, many members printed it off and missed the change. We ask that HMT publish future consultations on in pdf format as well as, or instead of, as a web page.'

The response document is available at

Diane Tan |Content manager - current awareness, CCH

Diane Tan is content manager, current awareness at CCH, Wolters Kluwer UK

View profile and articles

Be the first to vote

Rate this article

Related Articles