Quick Answer: HMRC can make collection errors, and there are no reciprocal tax collection agreements between the UK and Australia that would allow asset seizure. The dual citizen should contact HMRC directly to resolve the £3,000 discrepancy, especially since they properly notified of departure and received a tax refund in 2015.
Question:
Dear Jon,
I lived and worked in the UK for about 13 months in 2014/2015. I am a UK/Australian dual citizen having spent all of my life in Australia.
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For part my time in the UK I was self-employed (self-assessed) and for the remainder, I was employed.
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Recently when going through some old mail I came across a letter from HMRC stating I owe them £3000 for not filing tax returns.
I left the UK in 2015 and told HMRC I was departing. They even refunded the tax I had paid that financial year before I left.
It doesn’t make sense that I would have a debt owing to them when I informed them I was leaving. They are threatening to seize my assets in Australia if I don’t pay. Do they actually have the power to do this? What can I do to fix the situation?
Chris
Answer:
Chris,
My experiences with HMRC have been that they can and do make errors, and I agree, it doesn’t make sense that you informed them you were leaving the UK, they refunded you taxes paid, and are now trying to collect unpaid taxes.
If you left the UK and informed HMRC of your leaving the UK in 2015, what year(s) are HMRC stating you owe taxes for?
Have you spoke with or corresponded with HMRC?
I have also found in my dealings with HMRC, once an error has been pointed out to them, they do correct it immediately.
To my knowledge there are no reciprocal agreements between the UK and Australia regarding the collection of unpaid taxes, HMRC would have no authority to seize assets there in Australia. If they were to assign the debt to a collection agency there in Oz, that could produce a different outcome.
My advice would be to contact HMRC, email or enquiry form may be best, and we can look more at this once you hear back from them.
Regards,
Jon
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