Statutory Residence Test 1 Year on 17th June @HMRC Trinity House, Manchester
Lawrence Houghton – Head of the Advisory Board to HMRC
Chris Birkett – Compliance Officer for HMRC
It was great for myself and Steph Davies, head of our non res section at Whittaker & Co, to attend a Q & A session and seminar, being addressed by , Lawrence Houghton, head of the Advisory team to HMRC, who was paramount in the implementation and now statue in legislation (not just a set of guidance notes anymore) to define residency.
It has been a hard task since the rules came into effect from 6th April 2013, to define the new legislation. Looking through HMRC’s residence bible RDR3, raised many questions from accountants around the UK on the definitions of the new SRT (Statutory Residency Test), as they were open to misinterpretation of the rules and saw us sending many emails and having many conversations with HMRC’s helpdesk. The way the first set of legislation was written and published in December 2013 was totally controversial in the definition’s and to the rules put in place. The new online Tax Residence Indicator didn’t work properly when it was launched in May 2013, and we had to wait until April 2014 for it to be enhanced and then another 8 months for the final release of the on line tool which was in December 2014, since this date we are now happy that we are able to print off the results page for our client, which now gets sent in with their return making investigations and checks to our clients on residency more streamlined.
Steph & I were quite bemused that out of a room of 25 top accountancy practices at this seminar, Whittaker and Co, along with two others, were the ONLY ones that actually use the on line tool and kept the print out on our clients files, as HMRC pointed out “It’s in legislation” I think the majority of the room would have been calling team meetings when they got back to the office and changing their procedures.
It was apparent from the day that HMRC also seem to be having their work cut out getting online definition’s updated and to even admit that 2 years on the SA109 RR1 (Tax Return page for Residence, remittance basis etc.) Still needs amending with some of the misleading boxes within the tax return will not see them taken off until at least 2016-2017.
However, with all the admissions from HMRC, I did come away feeling we actually had bonded, both HMRC and Accountancy practices were in this together on Residency, where WE had been pulling our hair out on getting answers to the new rules, they had also had issues that saw them too having hair pulling moments. HMRC wanted feedback from us, this was a pilot phase for the residency team of HMRC getting Agents in and I have to say it worked and they saw this too, the old ‘two heads are better than one’ term was utilised today and I hope HMRC will take this Pilot phase and create this joining of heads in the future to a more approachable HMRC from an agents and clients point of view.
HMRC have set in stone legislation for residency that is fair, I wouldn’t say straight forward just yet, not until all the amendments have been made but the rule book is in place and there is no straying from that. We now have legislation and not guidance notes.
From our clients point of view, if they continue to listen to advice Whittaker & Co gives them then there should be no problem in continuing to enjoy tax free income from working overseas.
Anna Cooperwhite
Managing Director
Whittaker and Co
Further reading:-
https://www.gov.uk/government/publications/rdr3-statutory-residence-test-srt
