Accountants criticise non-dom rules

Accountants have suggested that the non-domicile tax rules of the Finance Act 2008, which received Royal Assent yesterday (July 21st), are not workable in their current form.

Experts from Grant Thornton and PricewaterhouseCoopers (PwC) claimed that the non-dom rules were rushed through parliament without proper consideration and that key stakeholders were not consulted.

Mike Warburton, an accountant at Grant Thornton, said that the previous rules had been in place since the turn of the 19th century, which meant that any changes should have required extensive consultation.

Instead, he accused the government of rushing the rules through as a reaction to a Conservative claim that it would fund inheritance tax and stamp duty cuts by focusing on non-doms.

He explained to the Telegraph: "If you're going to change the system you shouldn't do it as a knee-jerk reaction to something said by the shadow chancellor."

John Whiting, a tax partner at PwC, also criticised the new rules, saying that the way they had been implemented was "not the way to do tax legislation".

"It needs proper consultation to make sure everybody knows how the rules are going to work before they come into effect."

A recent study by Barclays Wealth revealed that many non-doms were planning on remaining in the UK despite the possible taxation changes.