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Legal sector warns of non-dom threat

13 March 2008
Categories: News , Income Tax , Residence & domicile
Law Society calls for extra consultation

New tax legislation concerning the non-domiciled is 'over-hasty' and could have a negative affect on the UK's legal sector.

That is the warning from the Law Society, which has called for a deferment to the implantation of the new rules, following their announcement in this year's Budget.

The organisation said extra time is necessary for effective consultation to take place and the full scope of the legislation to become clear.

The Law Society pointed out that the Finance Bill will not be published until shortly before the new measures come into effect.
It also highlighted the fact that many employees of law firms, as well as a large number of law firm clients, are non-domiciled.

The organisation said: '[These] over-hasty measure[s] could impact the attractiveness of England and Wales as a place to do business, and harm the leading global position of our legal sector.

'The brief time frame before the new measures come into force will mean the profession will have little time to advise clients on the detail, and valuable staff members could head overseas.'

Law Society president Andrew Holroyd added: 'Whilst the Government appears to have listened to comments… and has made some welcome changes to aspects of the proposals, the damage may already have been done.

'Not only will law firms risk losing important talent from their ranks, many of their clients will be seeking urgent guidance on what has so far been a very vague set of proposals.'

Mr Holroyd continued: 'The real disappointment is that the Government did not consult first and is now imposing on non-doms — many of whom are linked to the legal profession — a regime that is as yet still not that clear.

'The beneficial changes will be lost, however, because of the way the process has been conducted.

'A desire to legislate effectively has not been a feature of these measures.

'The Government is sensibly giving more time to other matters for consultation, whereas this is a matter where [ministers] need to take more time to consider the full impact of the proposed measures, particularly as there may be wider consequences for the UK economy.'

Sections - income tax and NI

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