reclaiming tax - UK

[Rivington]

We have friends who lived in France for the past 4 years, but have only just registered to pay French tax. The question is, will the French back date, and ask for the tax for the last 4 years, or will they accept the date of declaration as the starting point?

The problem for them, is that there is a question on the Form France - Individual, which asks if they want to claim repayment of taxes from the UK, (presumably for the years they should have been paying tax here.) They would only want to do this if the French ask for the tax to be back-dated, but as they don't know the answer to that, they cannot complete the form properly!

Has anyone had experience of this please and can help?

[EuroTrash]

Would not the best plan be to discuss this with their French tax office?

Since it's an irregular situation, it's going to have to be dealt with as a one off. And different tax offices do things different ways in any case, even when they are always supposed to follow the same rules.

But if they submitted their declaration before this year's deadline, and if it manages to processed without queries being raised, then they should be receiving their avis d'imposition very soon. Then they'll know for sure.

[Quillan]

If they were not registered in France for 4 years then they were registered in the UK I assume and must have completed a UK tax return. If they haven't then they will be found, fined etc by HMRC, I know this because they found me and sent me a fine for not completing a UK tax return for three years. Luckily I was declared in France for this time with my French tax form as proof so they 'let me off on this occasion', their words and not mine. What I am trying to get across is that HMRC can if they wish find you because I never gave them my address in France yet the fine was sent here to my French home.

 

So they must of being paying tax somewhere. If it was in the UK and they want to claim it back and declare it in France then they need the following form which has to stamped and signed by their French tax office. Note that it is in both French and English and without going into the obvious if you read the form and think about the questions asked you're not going to get away without paying tax somewhere for the last four years.

 

https://www.gov.uk/government/publications/double-taxation-united-kingdomfrance-si-2009-number-226-form-france-individual

 

The other question is what was this income if any over four years? Sometimes it is better to declare in France because the tax rate on that income is much less than the UK (private pensions for example, a route I am 2/3 the way down at present) whereas with others there is no tax advantage.

 

At the end of the day they really need to see a specialist in English and French tax as people here are not qualified and only speak, like me, from personal experience which can vary depending on the interpretation of the functionaires of the rules where the person lives.

[Quillan]

[quote user="EuroTrash"]Would not the best plan be to discuss this with their French tax office? Since it's an irregular situation, it's going to have to be dealt with as a one off. And different tax offices do things different ways in any case, even when they are always supposed to follow the same rules. But if they submitted their declaration before this year's deadline, and if it manages to processed without queries being raised, then they should be receiving their avis d'imposition very soon. Then they'll know for sure.[/quote]

 

You beat me to it with that advice. Our larger tax office does have a person who specialised with forigners and understands the UK tax system. I don't know if this is normal and every one has such a person but ours was very helpful, something the French functionaires are not normally noted for.

[Gardian]

I rather feel that one loses patience in a situation like this.

If I understand you correctly, they only want to 'come clean' if everything works out in their favour. Understandable perhaps, but unrealistic.

As Q says, they need to get themselves down to the local Impots and throw themselves on their mercy! They would help themselves a bit if they took the France Individual document with them and had half a clue as to what they were asking the people there to do.

If you don't know, just ask again.

The Impots will assess their situation for the last 4 yrs and generate an assessment, or rather assessments. Some of those may well be insignificant.

Any UK HMRC rebate will follow some time later. That's the way it goes if you ignore the (reasonable) rules.

[AnOther]

[quote user="Quillan"]If they were not registered in France for 4 years then they were registered in the UK I assume and must have completed a UK tax return.[/quote]Not everybody has to fill in a UK tax return of course and in fact it's probably the minority who do.

[Quillan]

[quote user="AnOther"][quote user="Quillan"]If they were not registered in France for 4 years then they were registered in the UK I assume and must have completed a UK tax return.[/quote]Not everybody has to fill in a UK tax return of course and in fact it's probably the minority who do.
[/quote]

Your being perdantic so we will try it this way.

They either filled in a tax form themselves or one was filled in on their behalf although I think most got the gist of what I was saying. The most important bit is that I assume they were ,tax resident' in the UK at the moment. I think we can also assume they have been paying tax in the UK and are trying to find a way to reduce their tax liability. If they paid tax in the UK on a pension then they would get a P60 every year (think thats the form) and if they have one for each of the four years they have been in France they can start paying tax on the income from the UK as of the year they register and prsent the P60's for the previous years. However there may be social taxes liable on the UK taxeed income in France for those years they have been here.

 

Personally I can't understand why people have this thing about not wanting to be French tax resident and create all sorts of schemes in their minds to avoid registering. Personally I have found the French system much cheaper than the UK as is the social payments we used to make. Likewise there are many benifits with regards to grants etc if one is tax resident in France. 

[Chancer]

With all your years of experience Quillan I am very surprised that you continue to make assumptions, you are even making (IMO unfounded) assumptions about the OP's motivations.

Mind you when a posting starts with we have some friends/we know some people etc........................................

[Chancer]

Quote:

They either filled in a tax form themselves or one was filled in on their behalf although I think most got the gist of what I was saying. The most important bit is that I assume they were ,tax resident' in the UK at the moment.

"Were" and "at the moment" dont go together, I assume (see even I do it [:P]) that you meant "were then" or "are now".

 

I had 10 happy years outside of either tax system, the IR wrote to me in 2005 and said that I no longer needed to submit tax returns and that they would no longer be sending them to me but that I should contact them if my situation changed, I admit to taking the instruction very literally and in a black and white manner.

 

In 2007 I was given the bums rush by the Hôtel des Impôts and told I was not imposable in France, dealing with the same guy last year he recalled the event and said that had he known then what he knows now he would not have done so, but tant pis!

They caught up with me a couple of years ago after being paid some money by the Lycée (I work as a bénévole and  told them that if they paid me this nominal sum it would open a can of worms) and I was asked to submit a French tax return, it didnt suit me to do so at the time so I wrote back saying that according to their legislation I was not imposable and would not be submitting their return unless they told me otherwise, in my meetings with the inspector last year he looked into this and found that it had been "classe sans suite" AKA my letter filed and forgotten.

 

This year I decided to go in and make déclarations going back the last 3 years because it suited me to do so, he was happy for me not to go back any further unless I wanted to, these déclarations including last years one were submitted after the deadline, in this case because it suited him not to be bothered during his busiest time of year.

I should explain the last year and this year bit, in 2014 probably around April time he said "come back and see me after the rush, in the month of June and we will sort things out" I said will that cause a problem because the declaration will be made after the deadline, he said no, well circumstances got in the way and it took me 13 months to return for my June meeting, there was no problem.

 

Not everybodys situation is the same and we shouldnt make assumptions of others based on our own situation or feelings. Also my experience is that making late or backdated tax returns has caused no problems and as long as you are not trying to avoid paying taxes they are happy for you to make postdated returns because it's in your Financial interest to do so and not theirs.

[Quillan]

[quote user="Chancer"]

With all your years of experience Quillan I am very surprised that you continue to make assumptions, you are even making (IMO unfounded) assumptions about the OP's motivations.

Mind you when a posting starts with we have some friends/we know some people etc........................................

[/quote]

What’s the saying about the two certainties in life?

 

Far be it for me to make any comment that anyone may be doing something wrong although I do find my thoughts leaning towards Gardians post.

 

Let’s be honest and say that dealing with the French tax authorities (or any authority in France) and the result you get depends primarily on who you deal with and a visit to another person may give a different result. We also know that the way legislation etc in France is disseminated, from the top down leads to different interpretations at each step which accounts for why you get people saying different things because they are in a different area or have seen a different functionaire (on the basis that to people in the same area may get tow different results). In short when it comes to the way these people work in France it is amazing anything ever gets done.

 

My letter from HMRC whilst very condescending also contained the same phrase as yours "that I should contact them if my situation changed," which it hasn't so I haven't with the exception of claiming back tax deducted in the UK from my pension payment. Likewise we always put our income in the same box on the French tax form because that’s where we told to put it by the functionaire at the tax office and were told that if it changed he would let us know. We have not been told it has changed in 13 years so we keep putting it in the same box and never paid a cent in income tax in all that time. According to the French system we are classed as poor and get many 'goodies' as a result and have had a couple of three figured cheques from them over the years. I don't know enough how the system works to 'play' it and I wouldn’t anyway, I simply do as I was told by them and it has, so far, worked very well for us but that’s not to say others should follow my example as it may work out the same way for them. I noticed, when I went to get my HMRC dual tax form stamped, that said functionaire has now retired but not being told that and thinking that all his documentation must have been passed on to his replacement I continue to put our income in the same box.

 

I am very aware that I am an immigrant in France so it is best to do everything correctly as people, often out of jealousy, are only to happy to denounce you if they think you are working on the black and not paying your tax. The irony of it is the only person who did denounce us was a plumber many years ago who was later prosecuted for charging people TVA when he wasn’t registered whilst we didn’t have a problem.

[parsnips]

[quote user="Chancer"]

With all your years of experience Quillan I am very surprised that you continue to make assumptions, you are even making (IMO unfounded) assumptions about the OP's motivations.

Mind you when a posting starts with we have some friends/we know some people etc........................................

[/quote]

Hi, This has been discussed on another forum ( with less judgementalism) here;

http://www.expatforum.com/expats/france-expat-forum-expats-living-france/824666-tax-question-reclaiming-uk-tax-prior-years.html

[Quillan]

I have just read the thread you point to. It is a shame that they didn't give the rest of the information that they posted there on this forum which would have stopped people second guessing.

 

Still it seems that the answers there will be more to their liking. Having spoken to the Imports here for my own purposes the tax on their company pension will be a lot less (but not zero) than what they will be taxed in the UK.

[Daft Doctor]

Let's face it, the OP's 'friends' have either been numpties or naughty. Fact is, if they've lived permanently in France for 4 years, then they have likely been French tax residents for that entire period. They don't have a choice in that matter, it is what it is, and if they have any form of income it should have been declared in France as part of worldwide income, even if (as in the case of UK property income for instance) it would not be taxable in France.

As well as being a legal requirement to declare worldwide income as French tax residents, there are some advantages in doing so. For a start it would establish a revenu fiscal de reference, which if low might be useful in some circumstances, e.g. being exempt from paying for TV licence. In addition, making tax declarations in France and keeping each annual avis d'imposition helps to prove length of French residency if ever questioned. If the OP's friends have any sense they'll do just as others have suggested, toddle down to the local tax office with their tails between their legs, pleading ignorant but wanting to put it right.......

[AnOther]

I don't see it's even a topic for discussion, either they fess up and regularise themselves or they don't, there is no half measure.

Either way could have consequences but not to do so is by far the riskier choice.

[Gardian]

Precisely ANO. Couldn.t have put it better myself.

As usual in these circumstances, the OP has diappeared without trace!