Reference
16-
Exchange of Staff with Hong Kong
Government.
J.e.
a DSJA
coded HK wanted
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£581 (marind)
£645 (sigh)
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I apologise for having held up for so long the analysis requested by Mr. Barrett.
2. I am grateful to Mr. Kinnear for the information that he has provided on Hong Kong Government terms of service and for the booklet on Hong Kong taxation.
I now attach tables showing (1) the emoluments of a Diplomatic Service officer filling a D.S. post in Hong Kong; (ii) the income tax position of a D.S. officer seconded to the Hong Kong Government on D.S. terms; and (111) the Hong Kong Government emoluments payable to a D.S. officer seconded to the Hong Kong Government.
Secondment on Hong Kong Government Terms.
3. It is clear from a comparison of the rates of take- home pay that secondment on Hong Kong Government terms would be financially unattractive to a D.S. officer. A further complication is that, unlike appointments to international organisations, Hong Kong Government terms do not appear to provide for the payment of travelling expenses, packing and transport of personal effects, car freight, transfer grants, climatic clothing allowances, etc. It would be necessary to get Civil Service Department authority for the payment of these items as well as, in the case of officers with children at boarding school in the U.K., the cost of the additional concessionary journey to supplement the one a year allowed under Hong Kong Government rules. There seems to be little doubt that if any of our people are to be seconded to the Hong Kong Government, it will have to be on D.S. terms.
Income Tax Position.
4. The income tax position of D.S. officers seconded to the Hong Kong Government on D.S. terms could well be more complicated than we had at first envisaged. Inland Revenue allow unilateral tax relief on the U.K. salaries of the officers concerned. I take this to mean in the example quoted in the table that on a salary of £4,027, Hong Kong tax of £574 (single),£395 (married with one child) would be payable and that Inland Revenue would allow tax relief of this amount. The U.K. tax liability would thus be not £1155 (single), £1,060 (married) but £581 and £665 respectively. But they would still have to pay the Hong Kong tax due on salary and allowances, and it is possible that rent allowance may also be liable to Hong Kong tax. These officers could thus be liable
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