Thousands of British expats in Spain remain “exposed and unprotected”

Information and questions about the Law in Spain and Andalucia.
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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby elusive » Wed Mar 31, 2021 4:59 pm

I wouldnt read the plastic tabloid that is the olive press if they paid me €60 year.

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby elusive » Sun Apr 25, 2021 11:09 am

Talking to an acquaintance the other day. Lived here about 5 years without residency. Worked for a while and had a healthcard via that. But never filed tax returns as he thought his uk pension was to small. He got residency at the last minute before the end of last year and in the last few weeks has had a letter from hacienda wanting around 500 euros for the 2016 tax year . So it looks to me like hacienda is going after people who suddenly became "residents" towards the end of 2020 expecting/hoping that most of them have actually been here long before!

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby olive » Sun Apr 25, 2021 11:58 am

2016? Might be part of a campaign. Well I have tried to do everything by the book. Have used a gestor to ensure no Issues with tax. I was audited for year 2016 six months ago. They found two “ errors” First I hold my hand up to. 2euros 80 of undeclared interest on a UK account. The second is a discrepancy between what I actually received in the bank as income and what I declared. They have” god” on their side as they obtained my P60 and that showed the discrepancy! ( the clerk clearly doesnt know it is April- April). Despite numerous letters from gestor ( which they just ignore) their steam roller just moves on. I have paid the difference and am just awaiting the fine. In the UK I would have involved an MP or a newspaper. Life is too short to do that here.
There is an amusing footnote. I have a small UK annuity which they believe as as a separate issue should be taxed as a normal occupational pension. They actually refer to it as xxxx annuity in their letters.

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby Wicksey » Sun Apr 25, 2021 12:22 pm

That's what I've always said Olive, that the UK figures will never normally be exactly the same as the Spanish ones due to the difference in tax years. The tiny bits of interest we get are in March and May, so it's split between the two UK tax years but within the calendar year for Spain. Ditto our occupational pensions which rise in April. The only thing that's the same is my OH's annuity which never alters. Aren't there more important tax frauds to pursue than 2.80€ in interest? I think we've only earned enough to pay tax here once so hopefully if there is a tiny discrepancy it won't make any difference.

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby olive » Sun Apr 25, 2021 1:47 pm

My suspicion is that Hacienda have a dept that does these audits and justifies the manpower on miscreants rather than actual money recovered. The big tax evaders employ experts. I could pay 2000 euros to get justice but the amount is less than that.

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby elusive » Sun Apr 25, 2021 4:05 pm

Yeah they go a year at a time going back upto 5 years as that as far as they can go. (I thought it was 4 but i guess not) so i guess hacienda will want their cut for 17-2021 off him aswell in the coming years.

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby Free at Last » Sun Apr 25, 2021 4:10 pm

elusive wrote: Sun Apr 25, 2021 4:05 pm Yeah they go a year at a time going back upto 5 years as that as far as they can go. (I thought it was 4 but i guess not) so i guess hacienda will want their cut for 17-2021 off him aswell in the coming years.
If they are referring to income received in 2016, that wouldn't have been due to be declared until 2017, so as long as they issued the demand before the end of 2020, wouldn't that still be within the 4 year period - just?

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby katy » Sun Apr 25, 2021 4:14 pm

I thought if a person had deliberately avoided paying tax then the 4/5 year limit doesn't have to be applied? Anyone know?

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby Wicksey » Sun Apr 25, 2021 4:25 pm

Is it only 4 years here. Used to be 6 years in the UK. I thought I'd read on here of people getting demands from longer ago than just that. I keep everything going back years just in case!

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby El Cid » Sun Apr 25, 2021 5:07 pm

It’s now up to 12 in the UK for some income such as letting property abroad. It’s also now 20 for fraud. Spain it’s 4 years from the last date that the declaration could have been made so effectively 4 and a half years. Longer for fraud.

They seem to be having a purge on 2016 at the moment. They get all your P60 info from HMRC. I don’t think they have to ask for it, they just get the lot and put it all into their computer system and it red flags any discrepancies.

If they are correct, you pay the unpaid tax plus a fine of 50% plus interest on the unpaid tax.

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby Wicksey » Sun Apr 25, 2021 6:02 pm

As long as they realise that the P60 will not reflect the figures on the Spanish return! I use the actual pay for the calendar year, plus there may be a slight difference in the exchange rates if you use the actual amount received in euros rather than using a flat exchange rate for the year. There are bound to be minor differences.

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby El Cid » Sun Apr 25, 2021 6:19 pm

They should not worry about minor differences in the amounts declared for a specific income source. What they will be looking for is a whole source of income that was not declared. For example, if you take a lump sum from a pension fund or investment and don’t declare it, then that’s when you will get investigated. It would be a clear case of deliberately not declaring a specific source of income. Rental income from a UK property is another obvious item.

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby elusive » Sun Apr 25, 2021 6:47 pm

Family members talking to people the other day who got caught out the same as above for not declaring a private pension as they thought it was below the threshold.They are now due they state pension and openly said they wont declare it after having to pay x amount of thousands for the private one. I'm sure hacienda will be double checking them as they have ready been done once. You think people would learn and realise the tax man has all their info!

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby olive » Sun Apr 25, 2021 8:40 pm

Wicksey wrote: Sun Apr 25, 2021 6:02 pm As long as they realise that the P60 will not reflect the figures on the Spanish return! I use the actual pay for the calendar year, plus there may be a slight difference in the exchange rates if you use the actual amount received in euros rather than using a flat exchange rate for the year. There are bound to be minor differences.
How would you deal with a pension provider that pays two months in December and none in January ( to help you with Xmas expense)? I have always used the second Dec payment as my first January and excluded the second payment in the subsequent December. Gestor is adamant that is correct too. I have got to the stage where I don’t care anymore. The difference is literally a few euros.

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby Wicksey » Mon Apr 26, 2021 10:03 am

I would do the same Olive. I can't really remember far enough back into my accounting days to say otherwise. I keep my accounts very simple these days but do declare all sources of income even though I think the interest is hardly worth the effort :crazy: I think the civil service pensions have caught people out more recently as they used to say not to declare them in the past.

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby AkoAko » Mon Apr 26, 2021 10:43 am

Not really relevant but i thought worth a mention as it demonstrates how the Tax man finds ways around inconvenient laws such as the Spanish statutes of limitation . Its been a common avoidance method for years to keep quiet about the death of a family member to avoid paying tax , after 4 and a half years had elapsed they were safe ( the 4 years we all know about plus 6 months which is the time allowed to settle matters ) . The law has changes now , the Taxman still only has 4 years to claim unpaid tax but now its not from the death of the person , the clock doesn't start ticking until 4 years from the time the Taxman has become aware of the death , could be 100 years .

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby Wicksey » Mon Apr 26, 2021 12:27 pm

The IHT limit is quite generous I believe, up to 1m€ tax free for residents when it's a close relative? It's not something we have to worry about I don't think! The worse thing will be CGT when the time comes. No way of avoiding that I don't think.

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby El Cid » Mon Apr 26, 2021 1:17 pm

Don't forget that when you get to 65 there is no CGT.

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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby peteroldracer » Mon Apr 26, 2021 1:24 pm

As long as it has been your principal residence and you have been submitting tax returns for - is it four years Sid?
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Re: Thousands of British expats in Spain remain “exposed and unprotected”

Postby Beachcomber » Mon Apr 26, 2021 1:52 pm

Three.


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