I have a client in this position . One further question .
If a customer purchases several items at the same time from different artists ,(which does happen as some are low value items such as handmade cards ) is it necessary to put these through the till as separate transactions for each artist's wares?
Or is it sufficient to issue one invoice for a single payment but clearly stating the breakdown amount of sale for each artist (and making it clear of course it is a disclosed agent transaction)
My feeling is you should still do the 30 day return , albeit late . That generates an individual reference number to pay through and the correct due date . It should be possible to get the whole process done within a few days provided the client can handle his/her Government Gateway. I think if you just put it on the tax return , it will generate a due date of probably 31 Jan 2022 incorrectly , and you will still have the risk of ongoing penalties racking up all the time the 30 day return has not been done . Maybe appeal any penalty on grounds the client was unrepresented and unaware , no guarantees but HMRC might be sympathetic
sorry I didnt make clear enough.
The US adviser is going to declare worldwide income in US tax return . Tax paid in UK on UK source income they are happy to DT credit for against the US liability .
They think the primary taxing right on the US source income is the US . (contrary to what the DTT indicates , which I read it basically says for a UK resident all pension income is taxable only in country of residence ) .
thank you. interesting .
The result as I see it therefore is there is no disadvantage to transfer to joint names , because Mrs A will get PPR on a sale as if she had lived there between 2000-2010 (+ last 9 months) even though she never lived there and wasn't married to Mr A during that time , and also lets imagine if she owned her own house elsewhere as a single person between 2000-2010 which would have been an exempt PPR for her throughout that time that is not a problem we are saying ? , generally speaking a person can only have one PPR at a time (with a bit of overlap ) , here she is treated as having 2 exempt PPRs for that 10 year period . I will read the legislation and HMRC manuals over again , it still nags me theres something not right I cant put my finger on .
thanks . I think the crux of this is , does American domestic tax law take precedence over the double tax treaty .
In a nutshell, I have a scenario where not much tax has been deducted at source , I put worldwide income on the UK tax return and in accordance with the DTT it is all taxable only in the UK , so she pays £x,000 extra tax by SA to HMRC .
However, if the US laws trump the DTT (excuse the pun) , which I have seen it suggested it does , all worldwide income is declared in USA first , she pays the necessary $x,000 extra to the IRS as if she were a US resident . I am then provided with a figure of US tax paid which I put on the UK tax return for DT relief so probably very little extra then paid to HMRC .
I don't mind what the correct answer is, and the client wont. Just trying to get there .
It all boils down to which tax authority has first bite, does the extra tax on worldwide income get paid to the IRS or to HMRC . (something which is obviously very important to the IRS and HMRC to get right) I can only claim DT relief in the UK if the US tax was correctly paid in the first place .
The UK - Spanish double tax treaty indicates you should remain within UK tax system as a UK resident , and not taxable in Spain , provided you spent less than 183 days in Spain , your employer is in UK and has no Spanish permanent place of business .
The DTT indicates to me that she should be regarded as UK tax resident . She has no home or any property in the USA, nor any habitual presence there , she is UK national and UK domiciled, permanent Uk resident .
The income at stake is all pension income from UK and USA .(largest source is UK) DTT indicates all taxable only in UK if UK resident . The client has a US adviser who , because she has a green card, is seeking to tax worldwide income in the USA , and with DT credit for UK tax paid. I am starting discussions with them as I'm not convinced they are correct and , irrespective of having a green card I think we must still be working in accordance with the DTT
My answers
Not a surprise PD1 gets priority , some are more equal than others !
It says the public could get through in a little over 22 minutes .
our experience is closer to 60 mins in many cases , if the call isn't cut off before answering
I have a client in this position . One further question .
If a customer purchases several items at the same time from different artists ,(which does happen as some are low value items such as handmade cards ) is it necessary to put these through the till as separate transactions for each artist's wares?
Or is it sufficient to issue one invoice for a single payment but clearly stating the breakdown amount of sale for each artist (and making it clear of course it is a disclosed agent transaction)
yes just file a return as normal , it will be processed , I have done it
My feeling is you should still do the 30 day return , albeit late . That generates an individual reference number to pay through and the correct due date . It should be possible to get the whole process done within a few days provided the client can handle his/her Government Gateway. I think if you just put it on the tax return , it will generate a due date of probably 31 Jan 2022 incorrectly , and you will still have the risk of ongoing penalties racking up all the time the 30 day return has not been done . Maybe appeal any penalty on grounds the client was unrepresented and unaware , no guarantees but HMRC might be sympathetic
thanks for the answers on this , much appreciated
sorry I didnt make clear enough.
The US adviser is going to declare worldwide income in US tax return . Tax paid in UK on UK source income they are happy to DT credit for against the US liability .
They think the primary taxing right on the US source income is the US . (contrary to what the DTT indicates , which I read it basically says for a UK resident all pension income is taxable only in country of residence ) .
thank you. interesting .
The result as I see it therefore is there is no disadvantage to transfer to joint names , because Mrs A will get PPR on a sale as if she had lived there between 2000-2010 (+ last 9 months) even though she never lived there and wasn't married to Mr A during that time , and also lets imagine if she owned her own house elsewhere as a single person between 2000-2010 which would have been an exempt PPR for her throughout that time that is not a problem we are saying ? , generally speaking a person can only have one PPR at a time (with a bit of overlap ) , here she is treated as having 2 exempt PPRs for that 10 year period . I will read the legislation and HMRC manuals over again , it still nags me theres something not right I cant put my finger on .
thanks . I think the crux of this is , does American domestic tax law take precedence over the double tax treaty .
In a nutshell, I have a scenario where not much tax has been deducted at source , I put worldwide income on the UK tax return and in accordance with the DTT it is all taxable only in the UK , so she pays £x,000 extra tax by SA to HMRC .
However, if the US laws trump the DTT (excuse the pun) , which I have seen it suggested it does , all worldwide income is declared in USA first , she pays the necessary $x,000 extra to the IRS as if she were a US resident . I am then provided with a figure of US tax paid which I put on the UK tax return for DT relief so probably very little extra then paid to HMRC .
I don't mind what the correct answer is, and the client wont. Just trying to get there .
It all boils down to which tax authority has first bite, does the extra tax on worldwide income get paid to the IRS or to HMRC . (something which is obviously very important to the IRS and HMRC to get right) I can only claim DT relief in the UK if the US tax was correctly paid in the first place .
thank you
The UK - Spanish double tax treaty indicates you should remain within UK tax system as a UK resident , and not taxable in Spain , provided you spent less than 183 days in Spain , your employer is in UK and has no Spanish permanent place of business .
The DTT indicates to me that she should be regarded as UK tax resident . She has no home or any property in the USA, nor any habitual presence there , she is UK national and UK domiciled, permanent Uk resident .
The income at stake is all pension income from UK and USA .(largest source is UK) DTT indicates all taxable only in UK if UK resident . The client has a US adviser who , because she has a green card, is seeking to tax worldwide income in the USA , and with DT credit for UK tax paid. I am starting discussions with them as I'm not convinced they are correct and , irrespective of having a green card I think we must still be working in accordance with the DTT