Rockgurl

I've been living and working in the USA now for 1 and a half years, but last week I received a letter from the Inland Revenue saying they are fining me £100 for not sending my tax return. I didn't know I was supposed to send in my tax return as I don't live or work in the UK anymore. I did inform them that I was moving, and they sent the letter to my address in the US. I don't own any property in the UK anymore, but I do have some money from my house sale in the bank in England, but I thought that wasn't taxable as it was from the sale of my only home. Can anyone enlighten me as to what to do?

Guelder Rose

The Inland Revenue are now sending out returns for the year ending 05 Apr 2005 ... so I'm guessing the fine relates to the previous year. If you left the UK prior to that tax year (06 Apr 2003 - 05 Apr 2004) then all you would need to do is advise them of the facts. However, if you left the UK after 06 Apr 2003, then you may well have been required to file a tax return for that year. The letter must say to which year the fine relates?

Remember ... even if you do need to file a return, if you don't owe them anything they should cancel the fine once they have the completed return and have agreed the same.

Guelder Rose

ps The sale of your main residence is not subject to tax ... the only hic-cup I could see to that issue is if you sold it some time after moving to the US. Regardless, I seem to remember that you are allowed a certain amount of time to dispose of a property before Capital Gains kicks in.

pps If the proceeds of the sale of your house are on deposit in the UK you may still need to file a tax return ... not sure about this, but I'm sure the IR website would give you all the answers.

Rockgurl

I worked until November 2003, and emigrated in December 2003, but I was taxed appropriately by PAYE system by my company so I assumed that I would not need to do a tax return. I've never done one in my life and have no clue about tax issues as in the UK your company handles all that. I will have to call them and tell them that I was employed and provide wage slips. Thanks for your help.

franc111s

If you have finished with the inland revenue then either send it back with a letter and a copy of your US tax filing (a polite 'pxss off" will do )..

Either that or send back with address unknown. If as the other poster said, you were in the UK for even part of the year, you need to pay the fine. Ignorance is not an excuse. If you plan to live hear forever then go to step 1....

Rockgurl

I sold my house about 7 months after I moved. What is the time allowed?

Rockgurl

Actually, I think I know why they wrote to me now. Before I moved I was planning on renting out my home, and had to fill in a tax form letting them know that I might get some income from this. I never actually rented my house out in the end so I didn't get a penny. I don't mind paying the fine if I am in the wrong, I just don't want them to come along and tax me a sh*t load of money from the proceeds of my house!

mandpete

Just a quick note, pay the fine as soon as possible because they start charging interest on late payments.

Ray

Did you file your P 85

The claim for non resident tax status is made through the filing of the Inland Revenue departure form P85. Generally, individuals who are leaving the UK for employment purposes will be considered non resident if they remain outside of the UK for at least one complete UK tax year. Individuals leaving for other purposes may have to demonstrate that their absence will last for longer than three years.

Guelder Rose

She only needs to pay the fine if she owes the IR money. I know a few people who have been fined for not filing on time ... and the fines have then been deducted (including all interest charged) once the IR agree that no tax is due for the period.

Rockgirl said she had intended to rent out her home ... she didn't in the end, but as far as the IR are concerned she might have received rental income ... therefore the return is due. She left the UK in Nov 2003, and therefore must submit a return for the period Apr 2003 to Apr 2004. Even if you don't normally have to file a return ... if the IR decide to send you one, you have to fill it in and send it back. As far as the IR are concerned, they don't care if you have finalised PAYE issues prior to leaving ... as that is not the only type of income that is taxable. The tax return will simply serve to clarify Rockgirls status for that tax year.

Rockgirl ... get the return and complete it ... if you only have PAYE income it will be really easy to complete as the majority of the form will not apply to you ... enclose a letter confirming your situation. I'm sure that will be the end of the matter ... and you do not need to declare the profit you made when you sold you main residence. If you don't have the return you could contact the IR by telephone ... they will either send you a duplicate return to complete, or if you explain your situation and are really lucky, they might just let you off the hook completely!

Elvira

My advice? Ring them! Whenever I've had a query about tax or was confused about something related to IR matters, I would ring them (or go and see them in person when I was back in the Ukay...). And they have always been extremely helpful - and polite.

Yes, really!

Guelder Rose

One further point ... you may well be entitled to a refund of tax overpaid via your previous employer. They may have taxed you appropriately, but they would not have been able to take into account the fact that you were leaving the Country before the end of that tax year.

Get a duplicate tax return if you don't already have it, complete it and send it back to the IR ... your P45/P60 will give you all the information needed to complete the PAYE section of your tax return. You will also need to get a certificate from your bank in England to confirm how much interest you received on monies held on deposit for that tax year (you may well have that info on your statements). I know interest on deposit is taxed at source, however, it is only taxed at 20% ... so the IR need to know what interest you received just incase you are a higher rate tax payer, etc.

Guelder Rose

I didn't say that she 'needed to pay the fine' ... what I said was that if Rockgirl was resident in the UK during the tax year 2003/2004 she would need to complete the tax return.

I don't think a polite 'pxss off' would be accepted ... and an 'address unknown' would prevent her from clearing up outstanding issues, i.e. having a clean slate ... and would also result in her not receiving any refund of tax overpaid that may be due to her!

Guelder Rose

If you were going to rent your house via a management company they would have had you agree that they would deduct tax at source. I seem to remember that the IR require management companies to deduct tax at source whenever a landlord is not resident in the UK. The landlord then has the bother of claiming back any tax overpaid at the end of each year.

They won't tax you a sh*t load of money from the house sale!

bored-silly

I think you have to have lived in the house for two of the last 5 years to avoid capital gains tax on the money you got from your house sale.
I'm sure someone will correct me if I am wrong. Second thoughts, please don't, I have just sold my beautiful house in the UK because of this very reason!