Tax exiles may be forced to pay back the taxes they have avoided since moving out of the UK, a new court ruling has suggested.
Under the previous guidance issued by HM Revenue & Customs to both businessmen and those in accountancy jobs, Britons could be deemed to be exempt from UK taxes should they spend fewer than 91 days resident in the country, with this prompting numerous celebrities and businessmen to establish themselves as tax exiles abroad.
However, the Court of Appeal has now ruled in favour of HMRC in its case against a businessman who moved to the Seychelles back in 1976.
According to the tax department, though he stuck to the '91-day rule', the businessman had never in fact been exempt from UK taxes as a non-resident citizen, meaning he faces a backdated tax bill of around £30 million.
Specifically, the judges ruled that, though he was out of the country, he never really severed his ties with the UK, and as such it could be seen that, with his properties and family and friends n England, he was still a resident, even if he was in the Seychelles.
Despite this, the barrister acting for the businessman has argued that the ruling "involves a wholly wrong reading of the policy", with a further appeal to the Supreme Court expected.
This comes soon after McGrigors revealed that HMRC has seen a 360 per cent increase in revenues generated from tax avoiders over the past five years.
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