Why India-UK relations still feel taxing

Why India-UK relations still feel taxing
Why India-UK relations still feel taxing

In the context of Global Britain, it is important that Indian professionals do not feel unfairly taxed while contributing fairly to the UK economy. Indian talent, be it in the field of technology, manufacturing or medical, is firmly woven into the tapestry of the UK economy. In UK Home Secretary Sajid Javid's own words, the UK issues more skilled worker visas to Indian nationals than to the rest of the world combined and the country's National Health Service (NHS) would collapse without the contribution of thousands of Indian medics. These statistics are impressive on paper, no doubt. However, behind these headline figures is a festering issue of unfair tax liabilities imposed on some Indian professionals. The issue was raised in the most diplomatic spirit by the Indian High Commissioner to the UK, Ruchi Ghanashyam, at a diaspora event attended by Javid in London recently. “I want to draw attention to the National Insurance (NI) exemption for Indian nationals is 52 weeks, while for some other countries it can be three to five years. An estimate puts this loss of contribution to approximately £230 million for the employer and £200 million for the employee,” she pointed out. Now, these are not insignificant figures when taken in the context of the most recent tax analysis on India companies in the UK. According to the CII-Grant Thornton 'India Meets Britain Tracker 2019', Indian companies in the UK paid around £684 million in corporation tax in 2019 - up from £360 million in 2018. These are some solid tax contributions to the UK economy and it is only fair to expect that Indian professionals are not subjected to what effectively amounts to a tax grab. NI is a form of contributory tax paid by UK residents, eventually ensuring access to a state-funded pension in later life. However, the minimum period of NI contributions to gain entitlement to a state pension is 10 years, which an Indian employee on a limited-period Intra-Company Transfer (ICT) visa is unable to take advantage of. This effectively means forfeiting the entire amount paid in. These tax woes are also compounded by the recent doubling of a health surcharge, imposed on professionals from outside European Union (EU) living and working in Britain. Besides the fact that the amount itself is extremely high at £400 per person per year for anyone in the UK on a work, study or family visa for longer than six months, it has proved particularly counter-productive with the UK's urgent need to recruit more Indian doctors. Clinicians wishing to work in the UK are already facing burdensome processes relating to regulation and immigration, and on the top this surcharge is only going to see UK losing out on quality healthcare professionals from non-EU countries, warns the British Association of Physicians of Indian Origin (BAPIO) in a letter to Javid. It claims that the policy is already adversely impacting the attraction of the NHS among Indian medics, who are in demand around the world. The group has been lobbying for the “unfair and highly discriminatory” surcharge be reversed for NHS employed professionals at a time when one in 11 NHS clinical posts are currently unfilled, with the severe shortage likely to grow to around 250,000 by 2030. Other groups have also questioned the extremely high surcharge on the grounds that it amounted to “double taxation” for long-term migrants, who are already expected to make tax contributions towards the country's care system. “Most people who do move here will work and they will pay tax. So doubling this charge is a form of double taxation. People are going to be ending up paying for the NHS twice,” says Satbir Singh, Chief Executive of the Joint Council for the Welfare of Migrants. The UK government says the funds are crucial for "sustaining and protecting" the country′s healthcare system. And, that is an important factor to consider. But it is equally relevant to ensure overseas professionals making real contributions to the UK's ecosystem do not feel short-changed. After all, in a global workplace, talent will just seek out fairer options.

No stories found.
No stories found.
No stories found.
No stories found.
No stories found.
No stories found.
India Global Business
www.indiaglobalbusiness.com