November Question and Answer Section

Newsletter issue - November 2011.

Q. I left London on 5 May 2010 to work full time for a Danish company in Copenhagen. My own UK-based company ceased at that time, and I received a capital payment on 30 November 2010. As I received that money after I left the UK permanently, do I have to pay UK tax on the pay-out?

A. Unfortunately yes. Although you may be regarded as not resident in the UK for income tax purposes from 5 May 2010, you do have to pay UK capital gains tax on the gain made in November 2010. The tax year is not split for capital gains tax, as it can be for income tax. If you are resident in the UK in any part of the tax year, you are taxed in the UK on gains made in that tax year, even if the gain is made after you have left the UK permanently.

Q. I've received an alarming letter from the Taxman about a private bank account I held in Switzerland from 2000 to 2005. I didn't include the interest from that account on my tax return as I thought it wasn't taxable in the UK. What should I do now?

A.The Taxman is writing to around 6,000 individuals and organisations that held accounts with a private bank in Geneva, based on a list of accounts stolen from that bank in 2006. Unless you had non-domicile status when you held your Swiss bank account, which may have permitted you to be taxed only on funds brought into the UK, you should have declared the Swiss account on your UK tax return. You need to come clean now, and pay the tax due on your Swiss bank account interest to the UK tax office. If you delay, the Taxman will open a serious fraud enquiry into your tax affairs. Talk to us about how to confess all to the UK tax authorities.

Q. The Taxman has hit me with a huge penalty for paying my company's PAYE late in 2010/11. But I've always paid my PAYE on time. What's going on?

A. PAYE deductions paid late to the Tax Office (HMRC) from 19 May 2010 attract automatic penalties. 'Late' means the cheque reached HMRC after the due date of 19th of the month or the electronic payment cleared the HMRC bank account after 22nd of the month or the last banking day before that. The HMRC bank accounts do not accept 'faster payments', which clear through most bank accounts in 4 hours. HMRC needs 3 working days to accept an electronic payment. You should have received a warning letter about your first late payment in 2010/11. If you believe you had a reasonable excuse for paying late you should appeal against the late payment penalty. We can help you with that.