AIBU to think expat families returning to the UK but leaving the wage earner behind (not paying UK tax) is possibly illegal (and not just cheeky) behaviour?

[RagingExExpat]

Looking for both opinion and factual content regarding this dilemma as it has confused me for many reasons.

Background - I am an ex-expat and I returned to the UK a while ago with my husband and children.

Many of my friends / people I know of are also planning returns (it's that sort of time - approaching secondary age children and, therefore, schooling prices increase in their current country of residence) and I have heard of quite a few people planning to return with their children but leave their husband (in most cases) behind in the current country of residence.

The plan is to have a family living in the UK with children in school, NHS used etc but the wage-earner staying on in the current country and, therefore, not paying UK income tax as, presumably, the wage-earner won't be in the country for more than the appropriate number of days during a tax year so not eligible.

This feels COMPLETELY wrong to me on a gazillion levels (morally as well as personally for the families involved albeit that's their decision) but, here, I'd like opinions on the tax element of it.

Is this tax evasion / illegal? Surely at some point there would need to be a declaration of where the money to pay the mortgage / bills etc is coming from - particularly obvious if the wife isn't working here at all. Additionally, do you think anyone would be bothered enough (apart from me, obviously!) to report them to HMRC for this if it became obvious the husband lived away and the new school-gate type friends suspected foul play...?

As an aside, I've also, sadly, been in the position whereby friends have returned to the UK when marriages have broken down. For family support etc more than anything else - albeit it is harder to stay in the country I was in without a VISA, and many wives and families are under husbands' visas etc so, sometimes, it may have been a forced move. I understand in those circumstances that an ex-husband may stay on and still be a resident in the country and pay his ex-wife maintenance etc. I can see that is different to the above.

However, when you're all still a family and totally connected but one group are in the UK 'claiming', for want of a better phrase, against UK benefits (schooling, NHS etc) but not paying any income tax due to location of the wage earner. This is shady isn't it or am I being OTT and it's not illegal at all?

What do you all think oh wise Mumsnetters?!

Um, Eliza9917.....these are not exactly 'poor' people. That's sort of the point. I do direct my tax evasion disgust at multi nationals and those able to use tax loopholes (off shore, tax vehicles etc) due to their wealth enabling them to use tax accountants etc. This is sort of what this was about because the people I really started the thread about are certainly not some of those named above by PPs i.e. those so desperate for work they have had to leave the country to find it and send money home.

I was talking about middle class people who have calculated that staying in a non-income tax country but sending their families home for schooling etc means they can bank more money and have nice holidays still - at the expense of their own family time together.

However, once it was made clear to me that this isn't illegal (genuinely, I thought having a family life clearly in this country but not paying your income tax here was, in fact, possibly tax evasion-ly illegal!) and, for many, it wasn't even morally off-colour, I thought there wasn't really a point making the distinction i.e. if we think it's ok for those who really need to leave to find work to send money home, then it can't be wrong for those who are fairly wealthy and wanting to save more doing that same thing now can it?

So, in that sense, it's all shades of grey.......leaving the country as, say, a builder did moons ago (Auf Weidershan, Pet style-y) for work in Germany or Spain etc, and then sending money home is exactly the same as wealthier families choosing to lose family time for more money/savings. Isn't it?

Once I'd realised it wasn't actually illegal and, in fact, so many felt it isn't even a bit wrong - what was the point of drawing distinctions between wealth levels?

The reason I 'give a fuck' is exactly as you've said above. 'Dodging' tax or 'leeching' as another poster has said above by anyone, by any method doesn't sit well with me and this was just another way I noticed it happening.

As I've said, genuinely, I thought it might be illegal but it's not! So then standing in judgement saying 'but, but these people are pretty wealthy really....isn't that worse now?? Don't you want to judge them now???? It's for good holidays and some extra savings whilst you pay for their children's schooling??!! Isn't it worse now!??!?!' seemed a bit churlish tbh. This is the system as it stands - they are able to have their children in school here by paying some VAT and council tax etc but they aren't liable for income tax so they can save all that lovely salary and use it as they wish. In a way, it's only a little bit better than even wealthier people employing tax accountants to avoid tax (not evade) where possible but still play the game within the law, if not the full spirit of the law.

Banks etc and multi nationals are a whole other ball game - worth feeling cross about them too (obv!) but this was just something I noticed in my own world and thought it was wrong because, defo morally wrong to me, I thought it actually might be illegal.

Wow! I see the thread has been re-spotted....

Yes, when we left the UK (and I think it's fair to say that many UK people leave to work with an intention to return at some point - ageing families etc) we were advised (by a law firm employed to help employees moving with the company) that it is best to cut all ties financially i.e. sell up any property (although many rent without issue) so you are very clear in your intentions to build a new life abroad for the next (at least) 5 years. So we did. I don't think it was playing the system - it was making our intentions very clear for our home country taxation system so there could never be any confusion. As I've said, I think we were advised absolutely to the letter of the law and that's where/why I was under the impression that living a family life in the UK but earning abroad would leave you liable to income tax payments. I was obviously incorrect in that assumption (as I've said a few times now...)

I agree, a system like the US, paying wherever you are isn't a great one for UK citizens and it isn't anything I'd want to see here, Pythonesque. And also, agree, lots of money to pay the mortgage etc is coming into the country - that is true. As well as the VAT and council tax etc. Perhaps I was looking at it the wrong way in that sense.

Well! I was just looking for facts and I've defo got them

You are talking about things that aren’t really ‘benefits’: the nhs and the public education system are services that are provided by the state. Yes they are taxpayer funded but - crucially - the UK is not set up to restrict access to these services in the same way as it does access to benefits ie welfare payments of various sorts, which have to be applied for and means or other tests applied to obtain them.

We are expats and have been out of the UK for 15 yes too. I’ve got a number of friends who had to battle to get accepted by the French Public Health Service because their income is earned and paid overseas, usually in the UK or US. one of the key checks that the authorities do here is to make sure that the primary applicant - usually the father or the main earner - is indeed in the French tax system and paying tax in France. No income in France = no tax paid in France = no carte vitale (which has to be presented at every medical appt or service etc). Neither can they benefit from public crèches or nurseries, for the same reason.

The UK has no ID cards and no special docs / cards that prove someone is allowed to use the NHS. Every UK expat I know just uses their parents address if they need to use the NHS during a visit: as long as they have a local accent and look local, no questions are asked.

This might all change after Brexit, but atm your friends are not going to be doing anything illegal. And the advice to cut ties with the UK surprises me: everyone I know at least keeps a bank account open in the UK after they leave.

Do you honestly care that much?
I would be more worried about corporations like Starbucks paying zero tax.
Besides you played the system yourself did you not?

Yes, BogstandardBelle - I couldn't get my words right there. I agree - services, not so much 'benefits'. Thank you.

Indeed we did also keep a UK back account but even that was advised against! Which we thought seemed crazy - so we did keep that. I can see now we were advised very strictly! Or perhaps I am remembering it incorrectly!! It's been a long, long time....

So it would appear that France like you to pay French tax to benefit from public services, creches etc? Interesting. That's kind of how I thought the UK was but I was wrong.

DullAndOld - no, we didn't. We left our home country correctly (paperwork etc to say we were non-resident) then paid everything due in the country we were in for over 15 years. Then we returned to our home country and pay everything due here now. As is the system.

We cut (financial/working/income) ties with our home country when we left so it was clear we weren't working or using services there at all and, therefore, not due to pay income taxes. I think the 'playing the system' has come from an unfortunate choice of words of mine above about the advice we received to demonstrate, clearly that we were leaving for a new life abroad for some time - which we were.

OK ..
But why are you 'raging' about what others are doing?
Are you worried that they might end up doing better financially than yourselves?

Yes i think its abit cf. Whilst pp have mentioned, ita not illegal but i wouldn't be comfortble with it.

People constantly get slated for not working, not contributing and receiving benefits (these people may have also paid into the pot previously). This is similar, with the 'benefit' being NHS and free education.

" paid into the pot "

guess what there is no 'pot'.

Is your husband's income to stay in the country of origin, or will you bring some/all into the UK?

Raging was just available as a name.....once again, I was a lot more irritated by this when I thought it was illegal (as well as morally a bit off-colour) but it's not so there you go...

Nah, I'm comfortable financially thanks. I wouldn't swap places and have my husband away all the time for more money / savings. We are happy as we are.

tbh if you are 'raging' about the possibility of some family doing better than you are, then I would suggest that your claim to be 'happy as we are' is probably false.

I was an expat for many years. I don’t use the nhs (not saying that all ex expats don’t) because it is dire compared to the private treatment my medical insurance provides. My child is in private education. I have a huge charity list. It all works out in the end, give and take.

I realise there is no 'pot' but the money has to come from somewhere. Those thats can afford it, should pay .

I have a friend whose done this and is apparently eligible for some benefits in the UK because her husband's income isn't taken into account. That's CF.

This is something I experienced when DH moved abroad before the rest of us (I didn't have a visa at that point, so could not go with him).

As soon as I told the Tax Credits people that he had moved abroad, they stopped my claim. When I called them, they said that I had to reapply as a single person.

I pointed out that our family income was basically unchanged, but they said I either reapplied as a single parent or received no tax credits at all.

So I reapplied, and of course they gave me much more money, because I was now single. I didn't need the amount they gave me, but I couldn't afford to go without the amount I'd been getting previously.

It was ridiculous really.

But the following your logic the vast majority of British households are doing wrong surely by taking more than they pay in. Why have you created this imaginary line where it suddenly becomes ok to force the taxpayer to pay for your needs?

you could view this as money earned overseas is being brought into the UK to pay the mortgage, buy food and clothes in shops, buy airfares etc.

So the family are contributing massively to their local economy by spending all that money earned overseas.

I bet the family has more disposable income than many living here. That money is all good for us as a country.

I've just read your post about how you were advised when you went overseas.

Sorry, but you were given crap advice. I work with people who work overseas (in the charity sector) and return, and we woudl never have given the advice you were given, for many reasons.

The problem is that the UK has no meaningful or effective way to restrict access to the services that it provides, particularly the NHs but also education. It’s pointless (and naive) to say that people shouldn’t be CFs because people will, by and large do whateever they are legally allowed to do in order to improve the lives of their family members. That’s not CFery - it’s a rational decision!

expats visiting the UK from EU countries should bring and be asked for their EHIC cards when they go to the dr, are treated at a&e or whatever, which enables the NHS to be reimbursed by the other country. But it’s rarely asked for - especially if you speak English / have a British accent / supply a local address. In fact I know expats who have tried to give their EHIC cards and been waved away!

You only need to be out of the UK for a full tax year not to pay earnings on foreign income. For split years there's some over-complicated formula.
We didn't sell our house or anything like that either. We fully intended to come back after 3 - 5 years.
I'm not seeing a problem with that part of it.

As to your scenario, I really don't see the problem there either if that is what that family has chosen. Money isn't being earned in the UK why should it be taxed there?
I suppose it's a bit of a grey area in terms of use of services (schools/NHS) but if the husband wasn't sending remittances then the family would need to claim benefits, presumably, and thereby cost the system more.

Sounds fine to me but surely any expat contract for anyone in a good job will have free education at a good international school included?

I think that their state pensions in the UK would be affected as well as perhaps their family cohesion.

I can't see anything wrong with it if they are happy though.

TIRF I don't think that's true any more. Probably only in very hard to staff postings (in locations nobody would go to without a lot of incentive) or very senior roles.

Most people posted abroad to "first world" countries won't get school fee deals.

DullAndOld - you are really getting very personal about me and my family and our state of being......happy or not. I've been very civil to you (and to all posters actually) and your mean tone is a bit uncalled for.

I've said it quite a few times now......it's not illegal, I get it. And, apparently, most people don't even think it's immoral for a myriad of reasons but, mostly, because these families are spending on food and flights etc in their locality so are good for the economy. Additionally, the money they could keep overseas and spend there, is being spent here instead which offsets any services they might use. It's not a "in, out" system - there are many people who don't use school places or the NHS etc.

I am surprised by that response but that's life I guess. I thought it would be seen as shadier than it is, but many people don't see it that way which is something I've learnt today.

That said, I don't think making decisions for you and your family, at the possible expense of community / others, can always be explained away as the rational thing to do and not CF. And, moreover, that the 'it's not illegal' explanation should be accepted. There are people out there who wouldn't do this as they can see it just feels wrong. Legal it may be, but, somehow, just a little wrong.

Anyway, that's only my opinion but I have definitely had my eyes opened to other points of view.

I've been perfectly nice throughout this thread, accepted views and taken things on-board. Tried to have a decent conversation.....but perhaps I should have taken this thread to Money Matters and not AIBU after all. Probably would just have someone tell me it isn't illegal and it would have stopped after a few messages with me perfectly happy with the response.

AIBU - not for the faint-hearted I guess I'll bow out now

I'd say it is @Evelynismycatsformerspyname

From my experience in Asia, Africa and around. We're still happily living abroad, by the way.

I guess it depends on what you mean by "very senior", of course.