HMRC gets tough on ex-pat accountants contracted to Libya

In what could be considered a harsh move, HMRC has told ex-pat accountants who escaped the recent Libyan troubles that they only have one week in which to return there once it has been declared safe or risk jeopardising their tax status.

Guidelines from HMRC say that where a non-resident UK citizen is forced to remain for extra days in this country in exceptional circumstances, those days will not be taken into consideration in determining residency status.

Despite this, ex-pats have been told that once the Foreign Office deems Libya to be safe, they will have to return there within 7 days. This seems extremely harsh considering the widespread damage to infrastructure and buildings that has been caused by the current conflict.

Meanwhile, Vince Cable has said that the government is going to crackdown on companies that do not disclose subsidiaries in tax havens.

Under the rules of the 2006 Companies Act, firms are obliged to divulge the location of any subsidiaries. Failure to do so would leave the directors liable to a penalty charge. However, so far this has not been invoked.

Earlier this year ActionAid claimed that 49% of FTSE 100 companies were breaking the rule. According to the Daily Mail, 27 of these companies have now complied.

Cable said that we must do everything in our power to eliminate tax avoidance by invoking these previously unused powers.

Martin Hearson from ActionAid said the charity was pleased to see that the government was working towards more corporate transparency.

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