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  • FIRST POST
    • Jumpman30
    • By Jumpman30 8th Feb 18, 1:42 AM
    • 7Posts
    • 0Thanks
    Jumpman30
    HMRC query
    • #1
    • 8th Feb 18, 1:42 AM
    HMRC query 8th Feb 18 at 1:42 AM
    Hi all,

    So a little background to this story.. I am in a long distance relationship with my American fiance. We are getting married later this year and I am moving to New York. I have been flying out regularly (about once every 4 months, for about a month) since the start of 2014.

    With that out the way, Iíll move on to the issue. I started working as a self employed driver around Nov 2013, just before I met my mrs. I took this route as I was struggling to find work and I saw it as a quick and easy way to make money, unaware what my future held, with America and what not. I stayed doing this until July Ď16 as the renewal for my licence was up and I didnít want to commit the money to renew as that isnít what I wanted to be doing.

    I declared myself self employed to HMRC as I didnít want to deceive them. I was earning minimum money, around £13,000 after expenses and not taking into account being in America for months of the year at a time. Self assesments can be hard to fill out at the best of times, but trying to add that I wasnít working full time was something else. I was pretty certain I didnít meet the requirements to start paying tax, and I donít remember being told to pay X amount.

    Fast forward to today, I am happily employed in central London for a well known, large media company, since May Ď17, paying my taxes and saving for my wedding.

    In January of this year, I received multiple text reminders to complete my self assessment before the end of the month, which I thought was strange, as Iím sure they can see Iím currently employed. Anyway, I called HMRC to clarify with them. They told me that I owed them £1,000 in taxes back from when I was self employed and £2,000 in late fee penalties...

    My question is, what should I do about this/what are my options, since I dispute this? I am leaving the country for good soon, which would be the easy way out. However, I donít particularly want this hanging over me anywhere in the world. I also donít particularly want to pay it. Is there a way around this without ignoring it and not paying 3K as I am also saving for a wedding? Is it a good or bad idea to mention I am leaving the country? Should I tell HMRC my situation at the time of being self employed and that I am leaving the country? Are they likely to be sympathetic?

    But seriously, thank you for reading and any useful comments in advance. Sorry if this didnít make sense or parts were vague, happy to clarify further.
Page 1
    • zenshi
    • By zenshi 8th Feb 18, 7:37 AM
    • 979 Posts
    • 1,984 Thanks
    zenshi
    • #2
    • 8th Feb 18, 7:37 AM
    • #2
    • 8th Feb 18, 7:37 AM
    You earned over the tax threshold therefore owe tax and NI. The only way HMRC will know if youíre not self employed anymore is if you tell them and de-register.

    I have no idea what will happen if you donít pay and move abroad but being the tax office, theyíre not going to let it drop
    LBM.....sometime in 2013 £27,056. 10 creditors
    Dec 17......£18,070.....7 creditors left 33% paid

    £26,200 on interest only part of mortgage (July 16)...will chip away £23,536
    £49,200 repayment mortgage ( July 16) £45,386
    • Silver Queen
    • By Silver Queen 8th Feb 18, 9:56 AM
    • 251 Posts
    • 1,377 Thanks
    Silver Queen
    • #3
    • 8th Feb 18, 9:56 AM
    • #3
    • 8th Feb 18, 9:56 AM
    The tax thresholds were 10,000 and 10,600 in the years that you've mentioned, since you earned over this amount you were liable to pay tax. As you haven't paid (presumably since 2014) you have owed the tax office money for four years, hence the penalty.

    Even if you don't plan to return to the UK I'm pretty sure that HMRC have an agreement with the US that the US tax authorities will collect any debt due on behalf of HMRC.

    I'd cough up. But probably best to wait for one of the experts to give their opinion. Alternatively you could talk to stepchange about it as I'm sure they would know.
    Debt Totals February 2018::
    £350 Natwest Credit Card / Now £0 (paid off and closed 04/2017 £15,500 postgrad loan from parents/ Now £11,050 £500 Loan from Parents 2 / Now £0 (paid off 16/02/18) £2,000 Overdraft Now £1,000
    • iolanthe07
    • By iolanthe07 8th Feb 18, 11:46 AM
    • 4,954 Posts
    • 4,657 Thanks
    iolanthe07
    • #4
    • 8th Feb 18, 11:46 AM
    • #4
    • 8th Feb 18, 11:46 AM
    I'm pretty sure that HMRC have an agreement with the US that the US tax authorities will collect any debt due on behalf of HMRC.

    I agree with this. HMRC and the IRS do talk to each other, as was made clear to me when I became eligible for a US pension on which I have to pay UK income tax.
    I used to think that good grammar is important, but now I know that good wine is importanter.
    • jubilee14
    • By jubilee14 8th Feb 18, 1:23 PM
    • 267 Posts
    • 844 Thanks
    jubilee14
    • #5
    • 8th Feb 18, 1:23 PM
    • #5
    • 8th Feb 18, 1:23 PM
    Agree with other posters here. One thing HMRC will not do is drop money they believe is owed to them. They need to justify taking money off everyone that owes tax irrespective of the circumstances. They may be sympathetic to how you pay it back but as you've not done anything in 4 years this might not be an option. Best to get it dealt with make sure you know how much you owe and arrange to get it paid otherwise the penalties will just keep mounting up. This isnt like a credit card and your not google so unlikely deals will be there to be done. Good luck in US.
    LBM Sept 2012
    started DMP 1.11.12
    Debt £37012/£7383 DFD Oct 2019 about April 2019
    • tlc678910
    • By tlc678910 9th Feb 18, 11:18 PM
    • 505 Posts
    • 890 Thanks
    tlc678910
    • #6
    • 9th Feb 18, 11:18 PM
    • #6
    • 9th Feb 18, 11:18 PM
    Hi,
    I think it must be worth appealing the penalty charges as you were unaware of the debt. Even if you missed a letter at the time it seems HMRC had your phone number (as you received the text reminders for self assessment and had your employment details (so could have collected through your PAYE code perhaps) but they have let several years go by without reminders or attempts to collect?

    Perhaps this was an oversight on their part as I must have had 5 or 6 reminders this year, by email and text, when I had completed my self assessment but not yet paid. You could ask them about their usual process for this and if it was followed. I expect you would still owe the tax even if you could persuade them to consider the penalty charges.

    Tlc
    • kangoora
    • By kangoora 10th Feb 18, 12:14 AM
    • 522 Posts
    • 370 Thanks
    kangoora
    • #7
    • 10th Feb 18, 12:14 AM
    • #7
    • 10th Feb 18, 12:14 AM
    I'm not sure if HMRC will take you to court but at some point I presume they will. I assume you are going to want to apply for a green card or american citizenship once over there.

    You really don't want to have to declare a UK court judgement for non-payment of taxes from HMRC on your application.

    Or, even worse, not declare it and get found out later - that would probably be grounds for immediate deportation for falsifying an application.
    • iolanthe07
    • By iolanthe07 10th Feb 18, 11:57 AM
    • 4,954 Posts
    • 4,657 Thanks
    iolanthe07
    • #8
    • 10th Feb 18, 11:57 AM
    • #8
    • 10th Feb 18, 11:57 AM
    I'm not sure if HMRC will take you to court but at some point I presume they will. I assume you are going to want to apply for a green card or american citizenship once over there.

    You really don't want to have to declare a UK court judgement for non-payment of taxes from HMRC on your application.

    Or, even worse, not declare it and get found out later - that would probably be grounds for immediate deportation for falsifying an application.
    Originally posted by kangoora
    Excellent advice. The INS is really hot on any suspicion of iffy applications for a Green Card. IIRC you have declare that you have no outstanding financial claim against you anywhere in the world. I did my application in 1994, but I don't suppose things have changed much - they might even be tighter now.
    I used to think that good grammar is important, but now I know that good wine is importanter.
    • EssexHebridean
    • By EssexHebridean 10th Feb 18, 3:18 PM
    • 8,479 Posts
    • 45,256 Thanks
    EssexHebridean
    • #9
    • 10th Feb 18, 3:18 PM
    • #9
    • 10th Feb 18, 3:18 PM
    Why do you think your status of not working full time is relevant? It doesn't ask you whether you're full or part time on the SA form - the only relevant thing is whether you earn over the threshold. You must have thought it was odd not to be asked for NI contributions at the least, surely, and the personal tax allowance is generally fairly well known? Plus the years SA forms you DID fill out would have told you what was owed when you submitted them...sorry OP, but I'm afraid I find it a bit hard to believe you genuinely thought you could be earning money without having anything at all to pay...

    The rest are right though - just heading off the the US is definitely not going to get you off the hook with this, and in fact if you don't sort it I suspect you'll rapidly discover that they'll not be over keen to issue you with a green card etc...

    It might be worth you appealing the penalties as has been suggested but honestly, I wouldn't go holding your breath.
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£842.87 (12/02/18)
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    • Jumpman30
    • By Jumpman30 10th Feb 18, 3:55 PM
    • 7 Posts
    • 0 Thanks
    Jumpman30
    Hi all,

    Thanks for your posts and information. Itís interesting to hear that the IRS and HMRC have an arrangement as I didnít know that.

    Just to confirm, I donít intend on ignoring this. I will sort it before I go, but paying the full amount wouldnít be my ideal option.

    Iíll try to appeal and see what response I get. Even if the amount owed is lower than right now, that would be helpful.
    Last edited by Jumpman30; 10-02-2018 at 3:57 PM.
    • kram
    • By kram 10th Feb 18, 7:09 PM
    • 93 Posts
    • 82 Thanks
    kram
    I would contact them to see what options are available to you & get some kind of payment plan in place.

    I wouldnt mention about moving anywhere until you get things setup & in place with them.

    I hope you get things sorted.
    • iolanthe07
    • By iolanthe07 11th Feb 18, 2:18 PM
    • 4,954 Posts
    • 4,657 Thanks
    iolanthe07
    Whatever happens, good luck in the USA. I had a fantastic five years living there back in the 1990's; there's a buzz about the place and a 'can-do' attitude (or there was where I lived in California) which you just don't seem to get so much here. You'll love it.
    Last edited by iolanthe07; 11-02-2018 at 2:19 PM. Reason: typo
    I used to think that good grammar is important, but now I know that good wine is importanter.
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