Filing UK Tax Return

[asmielia]

Hi there,
I lived in the UK from September 2004-September 2005, and worked full time for most of that time. When I was there, I never ended up filing any tax returns, although of course I was paying taxes regularily through my paycheques.

Knowing my situation was somewhat complicated, I hired an accountant to handle my Canadian taxes for 2004 and 2005 when I got back. The accountant filled everything out for both years and since I had had quite a bit of time off during those years, it turns out I had a sizable return coming my way. I was pretty confused as to how the Canadian govt would owe me that much money (roughly $8000 split over the 2 years), when I hadn't paid them anything, and it was all paid to the UK govt. But after asking several times, he assured me everything would be ok.

I got my 2005 assessment back a couple months later and it gave me back all the money on the return. I was happy. Unfortunately, I got another letter from the CRA a few months later, saying they needed more information. My accountant sent it to them, but in the end they said it was insufficient, and hadn't provided them with a UK tax return to prove my claims. So they want money back.

So now, my accountant says I shouldn't pay back the CDN govt (they're asking for about $4500 back), and just file my UK taxes. I've called around (high commission, consulate) but no one seems to know what they're doing, so I can't seem to find anyone in Canada who would be knowledgable in such things.

So my questions are:
a) should I ignore my accountant's advice, and pay back the money the CDN govt is asking for (and accumulating interest), while this thing plays out? Then hopefully get it back later.

b) does anyone know an accountant in Canada who is familiar with UK tax law who would be able to handle this sort of thing?

Thanks in advance,
Adrian

[ichpen]

I for one would not ignore a letter from the CRA asking for money.

UK tax forms are incredibly easy, can be downloaded (and filed online) so don't be afraid to do some research and do it yourself if you have your pay stubs.

Taxation laws are not too dissimilar between the UK and Canada so you shouldn't be too lost.

Don't ignore the CRA unless you have a tax 'lawyer' on your side (not an accountant).

[dimbutnice]

you might want to post this question on the following forum where alot of the UK expats in Canada hangout (if you don't get much responses here).... Some of them will probably have to file tax returns both in the UK and in Canada and might be able to help...

http://britishexpats.com/forum/forumdisplay.php?f=56&sort=lastpost&order=&pp=24&daysprune=-1

[asmielia]

I for one would not ignore a letter from the CRA asking for money.

UK tax forms are incredibly easy, can be downloaded (and filed online) so don't be afraid to do some research and do it yourself if you have your pay stubs.

Taxation laws are not too dissimilar between the UK and Canada so you shouldn't be too lost.

Don't ignore the CRA unless you have a tax 'lawyer' on your side (not an accountant).

Yeah, you're probably right, I should just pay them for now. My accountant was adamant that they wouldn't do anything though, and that getting money back from them later would be a much bigger pain.

Doesn't the UK tax year run from April 5-April 4, which makes it tough to coordinate with Canada? I'd still really like some advice on this at least. Someone who's familiar with taxation rules in both countries.

Thanks,
Adrian

[tarnator]

Oh wow.
good luck.
I had a similar situation about 5 years ago - and after talking to my accountant here for over an hour, he 'unofficially' told me not to mention my UK income at all on my canadian taxes.

Ofcourse if I ever return to work in the UK, I expect that I will have to file my taxes retrospectively. Which is OK, because someone out there will know what to do!

My accountant here said that I would have to find an international accountant and that it would cost me an arm and leg to do it.

...well, I also have a speeding ticket in California, so one country or the other will catch me one day!

[cadave]

Hi there,
I lived in the UK from September 2004-September 2005, and worked full time for most of that time. When I was there, I never ended up filing any tax returns, although of course I was paying taxes regularily through my paycheques.

Knowing my situation was somewhat complicated, I hired an accountant to handle my Canadian taxes for 2004 and 2005 when I got back. The accountant filled everything out for both years and since I had had quite a bit of time off during those years, it turns out I had a sizable return coming my way. I was pretty confused as to how the Canadian govt would owe me that much money (roughly $8000 split over the 2 years), when I hadn't paid them anything, and it was all paid to the UK govt. But after asking several times, he assured me everything would be ok.

I got my 2005 assessment back a couple months later and it gave me back all the money on the return. I was happy. Unfortunately, I got another letter from the CRA a few months later, saying they needed more information. My accountant sent it to them, but in the end they said it was insufficient, and hadn't provided them with a UK tax return to prove my claims. So they want money back.

So now, my accountant says I shouldn't pay back the CDN govt (they're asking for about $4500 back), and just file my UK taxes. I've called around (high commission, consulate) but no one seems to know what they're doing, so I can't seem to find anyone in Canada who would be knowledgable in such things.

So my questions are:
a) should I ignore my accountant's advice, and pay back the money the CDN govt is asking for (and accumulating interest), while this thing plays out? Then hopefully get it back later.

b) does anyone know an accountant in Canada who is familiar with UK tax law who would be able to handle this sort of thing?

Thanks in advance,
Adrian

a) Your accountant is CLEARLY mistaken. What CRA is requesting is support for the federal foreign tax credits you claimed for taxes paid to the UK. This is REQUIRED to support the tax credit you claimed and to keep the refund you received. So, you must file a UK tax return ASAP and send a copy to CRA. If the tax liability owing on the UK return is the same as the amount of taxes you reported on your Canadian return as being paid to the UK, then you will have no more balance owing.

b) I would personally recommend Deloitte & Touche LLP. They have a tax service line called Global Employment Services (GES or GWES) that specializes in expatriates and inpatriate taxes. They can help you file your UK tax return, amend your Canadian return if necessary, and respond to CRA's requests for you. http://www.deloitte.ca to find a local office.

[CoolEddie]

Well hopefully when you were in the UK you got an NI number. Like others have said, UK Income Tax forms are very easy to complete, much easier than Canada's. I completed a P85 and P86 form and submitted it along with my original P60 and P45(1A) that I recieved from my employer. I actually recieved my tax refund from the UK government and not from the Canadian.