# Tax return and UK Pension payment.



## boldlygoes (May 27, 2010)

We have lived in Spain almost 7 years. I recently asked for a pension forecast and with the forecast came a letter from Inland Revenue telling me that I had not submitted a Self Assessment return for the year 04/05 & 05/06 and I owed £300 late return penalty plus interest of £42.02.
I informed them that as far as I was aware I had submitted the return for 04/05 and as I departed the UK in June 05 I did not need to submit one for 05/06.
Long story short, after several letters they still insist that I owe this and want the payment plus the returns.
My problem I no longer have the information to complete a return, my accountant has now retired and is no longer available. Can anyone advise me on the following-

If I ignore this will it just keep on increasing with penalty's and interest charges,
If I pay the penalty now will this stop the charges.
I am 65 in 4 years. If I still owe the penalty's and interest when I am due to receive my pension will it still be paid or withheld or have money deducted.
Any advise would be appreciated.
I am still in contact with my tax office but all they say is "you have to submit a return" they dont seem to appreciate that I have problem.


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## Joppa (Sep 7, 2009)

boldlygoes said:


> We have lived in Spain almost 7 years. I recently asked for a pension forecast and with the forecast came a letter from Inland Revenue telling me that I had not submitted a Self Assessment return for the year 04/05 & 05/06 and I owed £300 late return penalty plus interest of £42.02.
> I informed them that as far as I was aware I had submitted the return for 04/05 and as I departed the UK in June 05 I did not need to submit one for 05/06.
> Long story short, after several letters they still insist that I owe this and want the payment plus the returns.
> My problem I no longer have the information to complete a return, my accountant has now retired and is no longer available. Can anyone advise me on the following-
> ...


I am not a tax expert but generally you do have to submit your missing tax returns. Even though you left in June 2005, you were in UK for part of 2005-6 tax year so you should have made a return. Your penalty charge and interest will continue to accrue until you have made your returns and have settled any tax due in full (or have arranged to have it deducted from future payments by change in your code). You should have kept your financial record for some time until you make a tax return and then 15 months after that. If you can no longer locate your past record, you have to tell HMRC about it and then do your best to find out the figures, and tell them if estimated.
They can deduct tax owed by adjusting your code if they agree to you, or you have to pay on demand.


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## boldlygoes (May 27, 2010)

Thanks for the info.
As I was self employed altering my tax code doesn't apply.I didn't trade for the 05/06 so I assumed it was not necessary to submit a return. 
The year 04/05. I paid my accountant to complete my accounts and submit the return and assumed he had but the revenue say no.
As far as I know I dont owe any tax just the penalty for late returns but as I say, I no longer have the information.
They have not given me any help in resolving the problem only instructions on how to pay.
That is why I asked about my pension, if I dont resolve this will it effect my payment in 4 years time.


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## Joppa (Sep 7, 2009)

boldlygoes said:


> Thanks for the info.
> As I was self employed altering my tax code doesn't apply.I didn't trade for the 05/06 so I assumed it was not necessary to submit a return.
> The year 04/05. I paid my accountant to complete my accounts and submit the return and assumed he had but the revenue say no.
> As far as I know I dont owe any tax just the penalty for late returns but as I say, I no longer have the information.
> ...


As self-employed you should keep your record for 5 years after the end of the tax year in question, and longer if you haven't made a return, and it's your responsibility to do so, not your accountant's. You should have submitted your 05/06 return, even if you haven't made any profit. You indicate on your return that your business ceased, with date. 

Your state pension will be paid gross, and if you have any private or company pension, and you tell HMRC that you are a tax resident in Spain, that too will be paid gross. Then it's your responsibility to declare your worldwide income to Spanish authorities and pay appropriate tax. It's unlikely that HMRC will try to collect your penalty and tax due by an attachment order on your pension, but you should settle it with them well before you colelct your pension.


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## boldlygoes (May 27, 2010)

Joppa said:


> As self-employed you should keep your record for 5 years after the end of the tax year in question, and longer if you haven't made a return, and it's your responsibility to do so, not your accountant's. You should have submitted your 05/06 return, even if you haven't made any profit. You indicate on your return that your business ceased, with date.
> 
> Your state pension will be paid gross, and if you have any private or company pension, and you tell HMRC that you are a tax resident in Spain, that too will be paid gross. Then it's your responsibility to declare your worldwide income to Spanish authorities and pay appropriate tax. It's unlikely that HMRC will try to collect your penalty and tax due by an attachment order on your pension, but you should settle it with them well before you collect your pension.


Thanks for the information.
I realise that the keeping of records is my responsibility but as I said I have my accounts for 04/05, a paid invoice from my accountant for the preparation of accounts, I assumed it was all finished so did not keep the details after 5 years. The revenue had not contacted me which was no surprise as I did not give an address in Spain. Again my accountant had contact details.
I shall keep trying to get this sorted with the revenue but not sure how.


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## Joppa (Sep 7, 2009)

boldlygoes said:


> Thanks for the information.
> I realise that the keeping of records is my responsibility but as I said I have my accounts for 04/05, a paid invoice from my accountant for the preparation of accounts, I assumed it was all finished so did not keep the details after 5 years. The revenue had not contacted me which was no surprise as I did not give an address in Spain. Again my accountant had contact details.
> I shall keep trying to get this sorted with the revenue but not sure how.


If you had no income for 2005-6, just make a nil return to keep their record straight. You will still have to pay your penalty charge and interest, as they will not be waived. As for the missing 2004/5 return, haven't you kept your account books or are they still with your accountant? If the latter failed to file your return, you can sue them for professional negligence to cover your penalty, interest and other out-of-pocked expense, plus something for the distress caused. If your accountant was CA, you can use their complaint procedure. Details are in Professional Oversight Board - Complaints about Registered Auditors, Accountants and Actuaries.


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## 90199 (Mar 21, 2010)

I was also self employed finishing some time ago. Although I am a permanent resident in Spain I still have to submit a tax return to the U.K. authorities, my wife with similar income does not.

I can only presume that I have to do this because I was once self employed. However in recent years they have been sending me a refund, so it is not all bad news.

Regarding business accounts, at the time I ceased being self employed,(Retired), I was informed that I needed to keep my records for seven years.


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## doug610 (Mar 13, 2009)

Hi
This problem will not go away ,the tax people will be no help whatsoever,i had the same problem as you have and spent hours on the phone with them, but in the end one day the spanish tax office turned up at my house and told me that i had to pay the money now to spain,you cant get away with leaving england owing money to the taxman as they just send the debt to the spanish taxman,so my advice is to pay it ,to save a lot of problems with the spanish taxman


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