We explained in an earlier article how the government’s new proposals to attack the wealthy non-domiciles will have unintended consequences on the low-paid.

Now we have seen the detailed proposals in the Finance Bill the sheer extent of the paper mountain being created is becoming clearer.

Today’s example concerns the overseas student coming to the UK to study for three years. He works at the weekends in a supermarket.

There are two things that an overseas student quite often does whilst in the UK studying:

• They work back in their home country during vacations
• They keep a bank account in their home country

So let us imagine that Henri works in his summer vacation in France. He earns 2,500 Euros and pays a little tax in France. After spending the money on living during the vacation he buys some new trainers for 100 Euros and puts the balance into his French bank account.

He resumes his studies back in the UK in September.

The new Finance Bill proposes that if Henri lands at Dover wearing his new trainers, he should declare that fact to HMRC and be charged to tax on their cost.

We should also add that if Henri needs to buy some books to study in the UK and uses his French debit card to buy them, he will also have to declare that to HMRC and potentially pay tax on those as well.

These are what are known in tax law as “remittances”.

Henri could declare all his income (including his earnings in France) like a UK student and avoid the charge on remittances, but that would mean completing a Self-assessment tax return, reading around 100 pages of HMRC material about double taxation agreements and residence, as well as corresponding with the French tax authorities.

Whatever he does, he is in a fix. Henri may not pay any UK tax at the end of the day; but he will probably have to spend half the year studying tax law in order to satisfy the requirements of HMRC.

It is not too late for the government to introduce something workable in this Finance Bill for low income non-domiciles. They should try really hard.