UK to tax expats?

Could tax-free living end for Brits in Middle East after next election? Find out the latest news...

British Foreign Secretary David Miliband on Tuesday refused to be drawn on rumours ruling party Labour plans to tax expatriates if it wins national elections on May 6, but said Britons could be proud of the role their country was playing in the world.

Asked if Britain would begin taxing expats in the same way America does to raise much needed revenue, Miliband said: "The Chancellor has set out all of the tax proposals that we have and he has set out the justification for them and he has explained the way in which we make our tax decisions, and it would be quite wrong for me to start giving further new commentary on that."

In a telephone interview with Arabian Business, he added: "We have been very clear about the taxation regime that needs to exist, and we think it is the right one in the interests of the country."

American expatriates pay domestic income taxes wherever they are in the world. The only way they can stop paying is by renouncing citizenship.

The Foreign Secretary, who has held his post since Prime Minister Gordon Brown was appointed in June, 2007, said expatriates could expect to be served well should Labour remain in power after the elections.

He said: "Several things are important. I think first that British citizens living abroad should get the highest quality services from the Foreign Office and we are determined to deliver that. But second they can be proud of the role that Britain is playing around the world, and they can be proud of the leadership we offer.

"I suppose there is a third thing as well, which is that Britain under Labour is committed to the strong relationships with countries in which British people live. And that is the best guarantee of their own security and prosperity."

Asked what steps a Labour government would take to ensure British contractors who claim to be owed in the region of £500m for construction work done during the Dubai boom are paid, Miliband said he wanted to get his facts straight before commenting.

"I think you will have to talk to the Treasury about that. It is very important that I don't give false or wrong information on this and I want to get the facts absolutely straight," he said.

On the subject of Britain's influence on the global stage, which some commentators have said has waned in recent years, Miliband was defiant.

"We are not a global empire but I think we are a global influence, and people value the fact we are a global influence, whether it be on economic recovery or on climate change or on Afghanistan, we play a significant role," he said.

For the full interview, read next week's Arabian Business magazine, out on Sunday.

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