dragon,
wow, that is draconian!
As I said, not current with these UK changes but I can tell you that in oz it was similar in that you had to pay FULL oz tax and then claim back money paid to hkg IRD. I would be surprised if it doesn't end up exactly the same in this case. The UK would be flying(no pun intended) in the face of international double taxation convention if hkg tax was not reclaimable. I think the US system is also similar to what I am describing.
Time will tell....