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Where Taxpayers and Advisers Meet

Not paid tax for 5 years..

envb
Posts: 4
Joined: Sun Feb 01, 2015 3:46 pm

Not paid tax for 5 years..

Postby envb » Sun Feb 01, 2015 3:55 pm

Hello All,

I have a problem: in the end of 2009 I started to act as affiliate marketer in UK and then.. I left UK. I didn't registered the company, didn't pay any income taxes, I am not aware about any correspondence sent to my UK address.. Yearly income was about max 5k GBP/year. Now I am thinking about coming back to UK but I don't know what to expect. I am ready to pay any fines (or rather ready for agreements as I have no money now..) etc, I am ready to talk with HMRC, but I am worry about going to jail for above.. How would you see this case serious? Maybe I should start talk with HMRC before I go to UK?

Lambs
Posts: 1418
Joined: Wed Aug 06, 2008 3:15 pm

Re: Not paid tax for 5 years..

Postby Lambs » Sun Feb 01, 2015 5:28 pm

E,

Are you a UK / EEA national? You would then be entitled to the UK Personal Allowance, which has exceeded £5k for the last several years. I am assuming that the income is personal, not corporate.

Regards,

Lambs

envb
Posts: 4
Joined: Sun Feb 01, 2015 3:46 pm

Re: Not paid tax for 5 years..

Postby envb » Sun Feb 01, 2015 5:46 pm

Yes, I am from EEA country. I would add that:

- during last 5 years I was working in that EEA country
- I never let HMRC know about starting my own business, but before end of 2009 I had job in UK (taxes normally paid by employer)
- last time I was in UK was end of 2009
- income from that UK "business" is being sent to my non-UK bank account
- I am not sure how to treat type of the income - I would say personal (normally I should be registered as Self Employed, but I wasn't)
- yes - I am pretty sure I never went above "Personal Allowance" but only if we talk about UK Income. When combined with my EEA's country income, then total amount could exceed "Personal Allowance"
- not sure if that matter - during last 5 years I paid (my employer paid) standard taxes for me in my EEA country
- with regards to VAT - If I was living in UK and run that business - I assume I had to pay VAT (which I never did; I was receiving VAT invoices from my ad partner). On the other hand - I was not living in UK (and living in EEA) so then VAT for such services is 0.. But I think HMRC didn't know I am not living in UK, and could possibly asked me to pay that VAT..

So what could be the consequences? Maybe I should rather worry about Inland Revenue from my current country? Would it be possible that in such situation HMRC was sending at my UK's address request for paying income tax or rather VAT taxes? And later - even asking me to go to the court etc?

Lambs
Posts: 1418
Joined: Wed Aug 06, 2008 3:15 pm

Re: Not paid tax for 5 years..

Postby Lambs » Sun Feb 01, 2015 6:27 pm

While you are not resident in the UK for tax purposes, only income derived from your business operation in the UK would be taxable. So a UK PA may be more than adequate. However, as you have already identified, the state in which you ARE tax resident may be more interested in your UK income source on the presumption that it taxes your worldwide income. Most do, but several countries do not. You would need to check.

envb
Posts: 4
Joined: Sun Feb 01, 2015 3:46 pm

Re: Not paid tax for 5 years..

Postby envb » Sun Feb 01, 2015 8:01 pm

Thank you Lambs for sharing your point of view on my (bit complex) situation. So it looks to me I shouldn't worry about going to jail minutes after landing in UK..

Going further - I think the best idea would be (just after landing in UK):
- register the business (with 2009 starting date - so I assume there will be penalty to pay)
- shall I inform HMRC (ie by preparing Self Assesment/Tax Return form for years 2009-2015) about my UK income in the situation I didn't exceed PA?
- I am also worried a bit about that VAT (I've got invoices via email with my UK address stated there - so HMRC could be aware about not paid VAT by crosschecking my ad partner) - but in case HMRC was requesting me to pay it - I would then state that I was running my "business" from non UK, but still EEA country..

Lambs
Posts: 1418
Joined: Wed Aug 06, 2008 3:15 pm

Re: Not paid tax for 5 years..

Postby Lambs » Sun Feb 01, 2015 9:07 pm

E,

I am not sure why you are concerned about VAT. In the UK, your taxable turnover has to exceed a significant threshold before you are obliged to register for UK VAT (and to charge it) the limit is around £80,000 now although I cannot remember what it was c5 years ago. Unless you actually charged VAT without accounting for it to the UK revenue authorities? Which would be a much more serious matter.

Lambs

envb
Posts: 4
Joined: Sun Feb 01, 2015 3:46 pm

Re: Not paid tax for 5 years..

Postby envb » Sun Feb 01, 2015 10:00 pm

Now I checked these invoices (I never issued them myself, they were issued by ad agency which paid for my services) and luckily there is VAT 0 & adnotation: Not subject to local vat article 56, directive 112 etc.. And of course - I didn't exceed that 80k treshold. So it looks I am clear with VAT, clear with TAX in UK, not clear with not registering my business in UK (National Insurance contribution??) and probably not clear against my country's Inland Revenue.

So OK.. I think I can travel to the UK and then talk with HMRC about all the situation.


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