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Beware! HMRC’s arm gets longer

Paystream News

David McManus

Thursday 24th Nov, 2016

Tax avoidance has been under the spotlight for a while and now a little-known arrangement called 'Mutual Assistance in the Recovery of Debt' (MARD) is also destined to become a lot more familiar. It might be reasonable to assume that if you are resident outside the UK but still owe UK tax that it could be difficult for HMRC to pursue the debt. Not so!

The UK has had MARD agreements with EU countries since 2012 and several non-EU countries like Norway, New Zealand and South Africa and the list is growing as the world's taxation authorities co-operate ever more closely. The UK debt is notified to the tax authority in the debtor's country of residence for collection by them.

Of course MARD operates the other way too and HMRC will attempt to recover the tax owed by UK residents to overseas tax authorities. They merely treat the debt as they would a UK tax debt and take the same type of recovery action.