HMRC are continuing their attack on individuals who claim Non UK tax resident status. Where HMRC are of the opinion that such status is being claimed purely to gain a tax advantage they are on the attack in a number of recent cases.

In the recent Barrett case, which involved a popular music agent Lee Barrett, HMRC has successfully argued that because there had been no distinct break in Mr Barrett's pattern of life he should continue to be treated as UK resident for tax purposes. As a resulted Mr Barrett is being taxed on a bonus payment of £2,800,000 he received from the company of which he was a director. In the Barrett case HMRC has paid particular attention to where Mr Barrett's centre of operations remained. This included where it remained both before and after his claim for non UK tax resident status. HMRC considered his business and personal interests. They also tried to show that there was no material change to his pattern of life before and after the claim for non UK tax residence claim.

The Special Commissioners found that Mr Barrett remained UK resident throughout. This was at least in part because there was no distinct break in his pattern of life. Also on the Special Commissioners view he seems to have agreed with HMRC's argument that the major reason for the non resident claim for being resident abroad was the avoidance of UK tax.

The Barrett case reflects the decisions in the recent cases of Gaines-Cooper and also Shepherd.  The Barrett case continues to demonstrate HMRC's growing number of attacks and much tougher line when looking at individual’s particular personal and business circumstances surrounding their claims to be non UK resident for tax purposes.

In essence with the forthcoming changes to Non Domicled status from April 2008 and the ongoing attacks of people from all walks of life and in all types of business, and the previous Tax Amnesty (with I understand a second Amnesty arrangement on the cards) it is clear HMRC and the Government are very keen to sqeeze people from all walks of life and from all levels of income.