Foreign Perspectives

Foreign Perspectives
Travel, expat life and foreign politics. As featured on TV and seen on Reuters.

How many Inland Revenues are there?

September 21st, 2006

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The transition year from the tax system of one country to another can cause a number of peculiarities in payment of tax and social security as you’d expect.

For a start, the UK tax year runs from April to March whereas the French one is from January to December and both systems operate on the basis that you’re taxed by tax year. That’s relatively easy to resolve in practice as each country seems to apportion the tax according to when you made the move. What’s much more complex is the social security and healthcare arrangements.

We told the Inland Revenue in March 2004 that we were moving to France in April of that year. In fact, we told them twice in March as we wanted to register as overseas landlords (we’re renting out our UK property). Then we told them twice more in April that we had moved and indeed started getting letters directly to our French address. Snag is, that they continued to send letters to our UK address, my parents address and even my work address!

As you can imagine, we were quite busy for the first few months so it was June before we thought we’d have another go and told them yet again that we were here, twice more in fact. Finally on the seventh attempt they decided that we owed them over £500 as we’d not told them that we’d moved!

How come?

Well, the seven times that we told them we moved break down as follows:

1. in March and April 2004 we told our own Inland Revenue tax office;

2. in March and April 2004 we told the Inland Revenue “landlord abroad” people;

3. in June we told the Inland Revenue Child Benefit people; and

4. in June and July we told the Inland Revenue Tax Credit people.

In fact, we originally thought that telling just our own tax office was enough in that they use the same reference number for us as all the other Inland Revenue offices. So it should, but the problem is that the other offices were just lumped into Inland Revenue piecemeal within the last few years and integration between them is virtually zero at the moment. Even so, you’d think that telling our own offce twice was enough but in fact they still send letters to me at our previous address, my former work address and here, seemingly at random and it’s been over two years now since we made the move.

After yet another “pay up or else” notice in 2005, we wrote them a letter running through the sheer number of times we’d told them (and legally, we only needed to tell them once!). That at least resulted, eventually, in an apology and confirmation that we don’t owe them anything.

And yet, within the last week Wendy received another “pay up or else” letter. Funnilly enough the very same envelope contained a letter saying that she didn’t owe anything. Both signed by the same person!

Still, at least they’ve worked out that she’s living here. Where they sent my copy of the same letter (they always come in pairs) is anyones’ guess.

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Mas Camps News: administration hassles

September 9th, 2004

Our washing machine is on it’s last legs so we thought we’d get ourselves a new one before it keels over altogether so it was off to Darty. Thought we’d get a make that we’d heard of as supposedly it would be more reliable but seeing as the cheapest one I’d heard of was EUR 439 and the cheapest cheapo make was EUR 199 we figured, “hey, so what if it breaks down after the two year guarantee; we’ll just buy another one”. Anyway, el cheapo washing machine should be turning up sometime tomorrow. And even better, I got to use my brand new Amex card! Yes, we have now found two shops that take it. Not exactly the most useful card to have in France although it does look very pretty.

Seeing as it looks reasonably likely that the assorted Inland Revenue offices will consider me as a Crown Servant I figured that we’d best get the tax credit & child benefit claims in for John in case there’s some limit to the backdating of payments. It sounded a good enough argument to the child tax guy who was all set to pay us the tax credit but our record is currently locked (those guys gotta get a new computer system!) so that’s certainly sounding promising. Child benefit are debating the issue as supposedly you need to pay national insurance in the UK to get it but, assuming that the main tax office accept the Crown Servant status, that’s where I’d be paying it so I guess it’s a matter of waiting for their decision. Snag is that the French tax year ends in December so I need them to decide pretty soon. The biggest plus point would be that I could ditch our **** French accountant, all being well I’ll be looking for a UK accountant very shortly.

Also thought it was time to regularise Wendy a bit so it was off to the work permit place (for reasons which are even more complicated than I could possibly describe here). Anyway, after a very long chat there which which brilliant for my French, we now have to go to the Mairie to see about getting the residence permit which should have been here a month or two ago.

Oh, nationality again… the Paris guy reckoned, no, John wasn’t British because the new nationality legislation of 2002 still isn’t in force yet (despite it having gone through parliament over two years ago!). However, as I queried a few things he dug himself into a hole and now has to consult HQ. To summarise the state of affairs: as the old nationality legislation is still in force, I can’t pass my nationality on to John (they define “father” as “husband”). However, children born to Crown Servants (a rather significant status) are treated as though they were born in the UK. Were he born in the UK, Wendy could actually give him British nationality as she has a residence permit which is automatically renewable (next month in fact) ie she can live in the UK “without limitation” which means that in Belfast we could get a passport, so adding that to the Crown Servant status means that…. our man in Paris can’t answer the nationality question but he now realises that he’s given me enough rope to hang him! So, it’s possible that we could just apply for a UK passport for him in Paris (or indeed in Belfast when I’m over). Laughably, we can now get James a British passport so perhaps we’ll manage a consistent set some of these days (we’ve been pulled up twice in the airports already as it looks very suspicious to have a British guy and an Australian girl taking an Irish child abroad).

We’re now up to five separate groups of people who’ve stayed here since July and are buying houses. Latest arrival is a couple from Bristol who are off househunting as I write this. We haven’t actually noticed the prices going up and you can still get quite a reasonable place in the next village for about EUR 50,000. However, we did notice a similar property to ours (though about half the size) on sale for EUR 900,000 last week which is getting on for twice what we paid and seeing as our place is more than twice (possibly as much as triple) the size of it, I guess ours is worth more like EUR 1,500,000. Hmmm, almost enough to sell up & retire. Seriously though, if there were a way of getting the place valued over here, we’d be quite keen on having that valuation to take along to the bank.

I guess now and again it comes across that it’s a complete nightmare living here with all the bureaucratic nonsense that they get up to sometimes and the last week or two has certainly been one of those times when it’s end to end bureaucratic dead-ends. But then we sit back and think: hey, it’s September, it’s 30 in the shade, we’ve a really serious suntan, we own a hotel (that definitely falls in the category of phrases I never expected to be uttering, in spite of the odd joke after Roger bought the restaurant), and whilst we may have the French bureaucracy to deal with now and again, we’ve none of the daily hassles of working for anyone else. And aside from anything else, running a hotel is dead on: the guests are only here in the morning and evening so we’ve pretty much the whole day to ourselves.

Almost forgot, it looks like Mark C has relinquished his title of the “tightest tourist” (jointly held with Norman H and my Mum) and will be venturing over next year. Although, I’m sure he’ll be pushing for discounts when he gets here… He’ll also be making his second TV appearance, in France this time (naturally all costs being met by someone else!).

Arnold

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Taxing times

August 24th, 2004

Nothing happening on the baby front at the moment… Wendy reckons sometime this week for sure.

I thought I’d have a go at claiming the French “child benefit” a few weeks ago which helped to kick off quite a bunch of tax papers from the UK to join those starting to arrive from France.

Up to now the French side has been relatively simple. Apart from a few hitches several weeks back we are on track to be fully into the French health system (although probably not before John turns up) and, thanks to the European freedom of movement legislation, I was able to tell the French pension scheme where to go last week (they can’t force you into their compulsory pension scheme if you’ve already got one in another European country). I even had the first bill from the social security folk last week which I was all set to pay, until I started working through the UK Child Benefit form.

I got onto the second page when I came across the question “when did you stop working in the UK?”. That sounds simple, doesn’t it? Obviously it would be whatever date in early March I stopped getting paid ie just looking at the P45 would give me the necessary date. Ah, well, no.

Those of you in Rosepark may recall that I didn’t have a “leaving do”. That’s because I didn’t resign. I’m actually still working for the civil service! No, seriously, I am. Think about it: they’re paying for my further education, they invite me for promotion interviews, they send me circulars, they say I’m still subject to civil service rules,… OK, they’re not paying my salary, but in all other respects, I’m still “on the books”. Net effect of this is that it would appear that I can opt out of the French tax & social security system altogether. I would also appear to have the status of Crown Servant which is pretty significant in a lot of respects, and particularly so in terms of tax (and, I think, nationality ie it will affect John).

Anyway, I seem to have become a job creation scheme for the Inland Revenue and an education service for them and their French equivalents!

Assuming that they agree with this state of affairs, step one is to sack the French accountant (a major upside) and acquire a UK one then start fully unravelling myself from the French system. I’d also need to start planning for the fateful day four and a bit years off when I actually do have to resign although I think I can still stay out of the French system even then.

More anon on this one as it will probably take the Inland Revenue a month or more to work out the implications of my situation.

Saw a bit more on the dreadful year for the French tourism industry at the weekend. Seems that the travel agents had been telling everyone to go somewhere other than the south of France for their holidays this year. Net effect, naturally, is that the number of tourists knocking around France is well down. They have also changed their holiday habits and are generally looking at the forecast and going if it’s nice and going for shorter periods too. To be honest, we haven’t really noticed all this as we’ve been ramping up the promotion for the hotel since we started so it’s quite difficult to tell whether the number of customers we have now is increasing because it’s the high season or because of the increased advertising we’re doing. Probably a bit of both.

As it is, over the last month we’ve had more bookings than both the local hotels put together which impresses me no end as they’ve both been at it for years. Although we’ve been mostly getting bookings just a few days ahead we’ve already got bookings for October, December, February and March. Kind of un-nerving to have a nearly empty reservations book two weeks ahead but it’s been like that all through July and August yet we’ve ended up almost running out of sheets & towels for the rooms at times in practice.

All being well, we’re hoping to start properly promoting the restaurant in a few weeks time after Wendy recovers a bit. Suggestions for an opening promotion welcome!

Must head on now… ’tis tea-time.

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