How to get Inland Revenue to stop harassing me?

tyllwyd

I'm a bit confused why you are doing it this way round - if you are resident in the UK, why don't you pay income tax in the UK, and save the hassle of double taxation in Germany?

What happens about National Insurance? Are you liable to pay UK National Insurance contributions? Could it be NI they are chasing you for?

System

You should be completing a full self assessment tax return each year with a foreign income page (SA106) on which you would declare your pay and tax from all sources of income from outside the UK. HMRC would then give you credit for the tax paid outside the UK and providing the rates of tax outside the UK are not less than here you should not owe any tax in the UK.

It sounds to me though as if you are receiving "Determinations" which are estimates of money owed because they are waiting on you to complete outstanding tax returns. You need to get this cleared up as soon as possible as ignoring the letters can result in you being taken to court. If there are outstanding tax returns you need to get them completed. You say you completed your return online this year, if that is the case you need to contact HMRC to check if they received it correctly.

Staff in HMRC Enquiry centres who are recruited from various sections within HMRC, notably SA, PAYE, TCO and NICA, can and do regularly give guidance completing such forms as and when taxpayers bring them in. They should not however complete the form for you. It is your signature that goes on the form and that means you are declaring that every entry on the form is correct.

In particularly complex cases taxpayers are referred to the technical helpline or advised to seek advice from an accountant.

johnllew

arunadasi wrote: »

but my tax office DID do it for me the last two years, because of my particular complicated situation!.

Then maybe you completed the previous years incorrectly or not at all? IIWY I'd get an accountant quickly to sort it all out.

Cook_County

Your situation is complicated.

You are both not UK domiciled but may be remitting some of your German income here in which case it would become taxable here, largely not in Germany.

The self-employment income is fully taxable in the UK so Germany should give credit via exemption through progression.

The rules changed on 6 April 2008 and I cannot tell if you plan on paying the £30,000 charge for yourself at this stage.

You need urgent specialist advice.

arunadasi

Pam17 wrote: »

It sounds to me though as if you are receiving "Determinations" which are estimates of money owed because they are waiting on you to complete outstanding tax returns. You need to get this cleared up as soon as possible as ignoring the letters can result in you being taken to court. If there are outstanding tax returns you need to get them completed. You say you completed your return online this year, if that is the case you need to contact HMRC to check if they received it correctly.

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But I am NOT ignoring the letters; that's why I posted this thread. I;ve always been open about everything, filed tax returns etc, written them, called them, gone to the tax office. It is they who are ignoring me!

The situation is indeed complicated; my husband is a retired German civil servant and his pension is paid directly by the Federal State of Baden-Wuerttemberg, and tax taken out of it at source, paid into a German account. The pension is part of a bundle of benefits, to which I as his wife am also entitled. For instance, private health care worldwide for both of us and our children as long as they are in education. Neither of us are working right now as I am his full time carer; my carer's allowance is part of that bundle, and also they are paying over EUR 600 a month into my own retirement fund. I can hardly imagine that they are going to let us pay UK tax! We are never going to be a drain on the UK system; even if he dies before me, which is likely as I am much younger and healthier, I will get 75% of his pension.

It's important for us to keep that status as we are not here permanently. My husband is disabled and ill and does not want to be here. He is very attached to his home region in Germany and is only here because I am here and I am his carer, and I am mainly here to be with our children who are in full-time education. I'd prefer to live here permanently but I've promised him to return to Germany. If he ever needs to be in a care home it will be in Germany. Any hospitalisation he needs will also be in Germany.

Thank you for your advice; I think I will consult a tax lawyer.

arunadasi

Pam17 wrote: »

Staff in HMRC Enquiry centres who are recruited from various sections within HMRC, notably SA, PAYE, TCO and NICA, can and do regularly give guidance completing such forms as and when taxpayers bring them in. They should not however complete the form for you. It is your signature that goes on the form and that means you are declaring that every entry on the form is correct.
.

I am very bad at bureaucratic forms so I ran to the local tax office with all my documenst and the German statements, they helped me fill it out and I signed. The important part was the part about foreign income.

System

I would then suggest making another appointment at your local HMRC Enquiry Centre to clarify where this demand for money is coming from and if necessary lodge a formal complaint.

trevormax

Cook_County wrote: »

Your situation is complicated.

You are both not UK domiciled but may be remitting some of your German income here in which case it would become taxable here, largely not in Germany.

The self-employment income is fully taxable in the UK so Germany should give credit via exemption through progression.

The rules changed on 6 April 2008 and I cannot tell if you plan on paying the £30,000 charge for yourself at this stage.

You need urgent specialist advice.

I think this is incorrect.

The remmitance basis charge does not apply for the OP in this situation. Based on the length of time the OP has been living in the UK it would give her both resident and ordinary resident status meaning all income earned anywhere in the world is subject to UK tax regardless of if they remit it to the UK or not. The £30,000 charge does not apply.

arunadasi wrote: »

Actually, I think they are higher!

I'm not sure if the rates have gone up or down since 2008, but I have found a website which shows the rates and thresholds from 2008 which look to be lower than in the UK.

http://www.worldwide-tax.com/germany/germany_tax.asp this is a link to one of the very few (the only) english website I could find showing the rates in Germany. Part way down is a table showing (assuming they are the same for our 08-09 tax year):

They have a tax free amount of 7,664 euros = possibly like our personal allowance
The next 44,488 euro's are taxed at 15%
The next 197,848 euros at 42%
Anything else at 45%

The german tax year is Jan - Dec so the figures will differ part way through our tax year but they will be the same for 2/3 of it. I cant find detailed info about residency issues in germany so cant say if you have received a personal allowance over there or not. If you have then it is very likely you have not paid enough tax to cover what you should owe due to their basic rate being lower than the UK's. I think you will need to get on the phone to your german accountant and get some info from him.

You will need your income earned (gross) and the amount of tax paid. Then you could use one of the many calculators to calculate what your UK tax should be. Compare the UK amount with the amount you have paid in Germany. If the German amount is lower, you owe HMRC money.

I would also suggest maybe getting a UK tax accountant since you are liable to UK taxes.

Please note though that I am not an expert on taxes, especially German ones.

Edit: you could also post your income and tax paid in Germany from 6th April 07 - 5th April 08 here and we could work out what your UK liability should be.

tyllwyd

The OP says she is receiving income mainly from abroad (Spain & France). What I can't understand is why the OP would be liable to pay any tax in Germany on that money? I can understand that if she receives money from Germany that has already been taxed in Germany, then the double taxation agreement would mean that the German tax would be offset against the UK tax. But if money has come from Spain/France to a UK resident, isn't that money liable to UK tax (allowing for any Spanish or French tax that would be covered by those double taxation agreements)? Why would there be a tax liablility in Germany? Or is it not that simple?

arunadasi

tyllwyd wrote: »

The OP says she is receiving income mainly from abroad (Spain & France). What I can't understand is why the OP would be liable to pay any tax in Germany on that money? I can understand that if she receives money from Germany that has already been taxed in Germany, then the double taxation agreement would mean that the German tax would be offset against the UK tax. But if money has come from Spain/France to a UK resident, isn't that money liable to UK tax (allowing for any Spanish or French tax that would be covered by those double taxation agreements)? Why would there be a tax liablility in Germany? Or is it not that simple?

It's really not that simple. As I explained above we are taxed as a couple in Germany which puts us in a different tax bracket than if we were to be taxed separately. Taking me out will have implications for his tax payments. We have always been this way and it makes life simple... I can't imagine the complications that would follow if I were to be removed form the calculation; we'd have to have two accountants, one in each country, and make all kinds of complcated calculations. I hate complications!

All I really want to do now is to have my appeal against this new surcharge, and all the self-assessment forms I have sent in for the last few years, taken seriously or even acknowledged, as they have not been in the past.
When that is done I'll take the next step, if there is one.