Income tax as carer

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PavAmber
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Income tax as carer

Postby PavAmber » Tue Mar 29, 2022 6:25 pm

Hi all
We are permanent residents in Spain and have been paying tax here since 2017.
My wife is considering doing some care work on an infrequent basis in UK. She would be self employed (country cousins).
She would earn/invoice a maximum of £5k per annum and we are getting conflicting advice on tax matters from gestors/solicitors etc.
Currently we live off my private pensions In early drawdown which I declare as income here in Spain. They are paid gross in the UK.
We assumed we would just add her earnings to my pension income although difficult without P60s but have been told
1. she would have to become automono (wouldn't be worth doing it - the work) for <5k.
2. she can declare her earnings in UK as earned there.
3. earnings would be so low she doesn't need to declare.

None of the above feel "right" to us despite coming from "experts"
Any guidance greatfully received

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peteroldracer
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Re: Income tax as carer

Postby peteroldracer » Tue Mar 29, 2022 9:47 pm

"2. she can declare her earnings in UK as earned there. : she would still have to declare them in Spain as all world-wide earnings must be declared
3. earnings would be so low she doesn't need to declare." - see the above - all earnings must be declared
1 needs El Cid or Beachcomber's wisdom for this.
This stuff has been going on for years and IMHO is well overdue to be investigated by the taxman here.
I used to cough to disguise a [email protected] I f@rt to disguise a cough.

PavAmber
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Re: Income tax as carer

Postby PavAmber » Tue Mar 29, 2022 10:59 pm

peteroldracer wrote: Tue Mar 29, 2022 9:47 pm "2. she can declare her earnings in UK as earned there. : she would still have to declare them in Spain as all world-wide earnings must be declared
3. earnings would be so low she doesn't need to declare." - see the above - all earnings must be declared
1 needs El Cid or Beachcomber's wisdom for this.
This stuff has been going on for years and IMHO is well overdue to be investigated by the taxman here.
Agreed. Yet the viewpoint in point 2 was from a recommended solicitor and point 3 from the gestor who has done our returns for the last 5 years!
My layman's understanding and personal viewpoint is:-
a) couldn't/shouldn't declare in UK as tax resident here. Unless there is a ruling I'm not aware of.
b) with regard to earnings being so low, I guess standalone she may be below a threshold but not when added to my pension income.
Personal view is if she has to register as automono, then it isn't worth doing....

elusive
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Re: Income tax as carer

Postby elusive » Wed Mar 30, 2022 8:27 am

Why would she add her income to you pension? You both have your own allowances and would file your returns independently in spain unless the computer system says its cheaper to file them together.

Have you spoken to HMRC interms of whether you need to declare it there? Being self employed makes it more difficult but if it was a normal PAYE job then you would still be taxed in the uk as a spanish resident and have to declare the income in spain but you would be able to offset the tax already paid in the U.K on any tax due in Spain. Even if her income was below the threashold in spain and she had no other income i woukd still file a tax return here as it shows you arent trying to hide anything.

Lots of people do this type of work maybe if you are on f.book try brexpats in spain group.

PavAmber
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Re: Income tax as carer

Postby PavAmber » Wed Mar 30, 2022 2:22 pm

elusive wrote: Wed Mar 30, 2022 8:27 am Why would she add her income to you pension? You both have your own allowances and would file your returns independently in spain unless the computer system says its cheaper to file them together.

Have you spoken to HMRC interms of whether you need to declare it there? Being self employed makes it more difficult but if it was a normal PAYE job then you would still be taxed in the uk as a spanish resident and have to declare the income in spain but you would be able to offset the tax already paid in the U.K on any tax due in Spain. Even if her income was below the threashold in spain and she had no other income i woukd still file a tax return here as it shows you arent trying to hide anything.

Lots of people do this type of work maybe if you are on f.book try brexpats in spain group.
Sorry. I wasn't clear. By adding income I meant a joint submission/declaration. We've been informed it is usually the cheaper option.
Money she would earn would be below the threshold required for a return by HMRC in the UK. Our understanding is that anything we earn is now declared in Spain. That is certainly the approach taken by HMRC in regard to my pension income which is paid gross in UK and all declared/taxed in Spain.
As previously mentioned, my own feeling is that if she would be required to go automono then it's not worth doing.
She has asked on a carers forum but, in all honesty, the majority seem to be "winging it" and not declaring anywhere!

elusive
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Re: Income tax as carer

Postby elusive » Wed Mar 30, 2022 2:52 pm

Sorry i get you. When you do your tax returns the computer sytsem will automatically tell whether to file seperate or together it will say which ever one is the cheapest interms of tax liabilty So you dont need to worry about that.

Yeah not surprised by people not declaring. I would join and ask on brexpats. Its run by anne hernandez and they have lawyers who will answer questions.

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peteroldracer
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Re: Income tax as carer

Postby peteroldracer » Wed Mar 30, 2022 5:15 pm

One of (a few!) contradictions is that the law says you do not need to submit a return if your income is low, but also says you can be fined for not making a return! IMHO it is always better to make a return, as when you are pensioners with full tax history (4 years plus?) if you sell your home you have no retention or tax to pay, as long as it is your sole residence.
I used to cough to disguise a [email protected] I f@rt to disguise a cough.


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