. . Germany - the taxman cometh

[TiroFijo]

I worked through Albany in 2006-07 for about 11 months. I've read this thread and it has worried me but have let sleeping dogs lie. I really had no idea at the time there was a risk that the MC were running anything that F-Amt might think illegal or come gunning for. Also I followed the rules and declared the split part in the UK as distibution of profit (the year after deregistering from Germany) and paid UK tax on it, as per Albany's instructions. I've now received a letter from my German accountant stating that I might be charged with tax evasion and that to avoid this I should come clean now. What to do? Continue to let sleeping dogs lie (the letter appears to be just a heads up that there's a risk) or self declare and take the hit. In that case, will I be able to adjust my uk tax returns for those years to get back the tax I already paid? Very worrying indeed. Also, is anyone considering suing Albany for selling what looks to have been a fatally flawed scheme. I have not set foot in Germany since April 2007 when I deregistered and have no intention of going back.

Hang on here, how can your german accountant know about your split income as albany would have paid it into an offshore bank thus not even coming into germany. Your german accountant would have only seen your money that you would have declared and brought into germany. I think either you or your german accountant is having a laugh. it's not like Albany were raided by the crowts and got your name and invoice details from them. So do tell how they could know about the dosh that you squirreled away and then chose to declare to the hmrc.

[poppy01]

Hang on here, how can your german accountant know about your split income as albany would have paid it into an offshore bank thus not even coming into germany. Your german accountant would have only seen your money that you would have declared and brought into germany. I think either you or your german accountant is having a laugh. it's not like Albany were raided by the crowts and got your name and invoice details from them. So do tell how they could know about the dosh that you squirreled away and then chose to declare to the hmrc.

They stated they had 2 other clients who had been charged. The letter didn't state that they knew for certain I had such income, it was more along the lines of 'if you did this, then we advise you should fess up', No I'm not having a laugh, I really would like some advice. (There's too much suspicion on this thread.). also I wouldn't describe declaring the income to hmrc as 'squirrelling it away'.. also its spelt 'krauts'

[TiroFijo]

They stated they had 2 other clients who had been charged. The letter didn't state that they knew for certain I had such income, it was more along the lines of 'if you did this, then we advise you should fess up', No I'm not having a laugh, I really would like some advice. (There's too much suspicion on this thread.). also I wouldn't describe declaring the income to hmrc as 'squirrelling it away'.. also its spelt 'krauts'

If I was you and now that you have not worked in or been to Germany since 2007 and they have nothing on you then I would let it go. First of all they would need proof that you did such a thing and without evidence they cannot do much. They would need your invoices that you sent to Albany and then compare them with what you stated on your German tax returns. Now the fact that they do not have this and also the fact that Albany have gone under I would think that they would not be anythig that they can do. Also they are only saying 'if you did such a thing then....' which is pure speculation. Add to the fact that they do not know where you are now, but that is beside the main point which I have already stated. I would let it go and tell your German tax accountant as such.

Also the two other client of your german tax accountant that were charged must have been so due to there being clear evidence of tax evasion.

This thread is dealing about people who were raided and had their details passed over to the German tax bods, none of which has happed or likely to happen to you.

On the other issue of squirrelling away, as far as the Germans are concerned that is exactly what you did, they see it as their tax euros and not hmrc's. Why you gave it to the hmrc I don't do as if you had completed a years of non UK tax residency then they would have had no right to it.

Anyway keep mum and I'm sure you will be fine.

[gremlin]

So do tell how they could know about the dosh that you squirreled away and then chose to declare to the hmrc.

If you worked in Germany with a German agent the F-amt will go directly to the agent and find out how much they paid Albany. Then they will want to know what happened to the difference.

[TiroFijo]

If you worked in Germany with a German agent the F-amt will go directly to the agent and find out how much they paid Albany. Then they will want to know what happened to the difference.

Sorry, I automatically assumed he would have worked thro a UK agent as is usually the case. But even then they have to have a good reason to go to the German agent, I mean it has been 3 years since he left. Even then I would not go volunteering information and as he stated he has no desire to return to Germany so he should not have a problem.

[gremlin]

The F-amt can ask for your UK bank statements for the years that you worked in Germany. You can ignore this but they have the powers to gain this information via the courts.

[poppy01]

The F-amt can ask for your UK bank statements for the years that you worked in Germany. You can ignore this but they have the powers to gain this information via the courts.

no german agent was involved. it was a uk agent, (with whom i might have cause for complaint as they recommended albany to me). i feel that the tax i might owe might not be worth the bother of courts etc.. but none of this means i'm not worried. apologies if i've taken up space on the thread. it seemed relevant to me

[SalsaFever]

does anybody know if the F-amt will give you time to pay

F-amt gladly welcomes those seeking payment arrangements.

It's one of their tricks to make people easily swallow the tax bill. They know most of the contractors don't have deep pockets to accommodate such amounts.

e.g. I heard f-amt offered someone to arrange 120 months installments (10 years) for 90k back taxes based on %6 annual interest. Pretty much like a mortgage.

Meanwhile bankrupcy is also an option if you don't have real-estate. (assuming you already placed your assets into Cayman Islands)

[SalsaFever]

The F-amt can ask for your UK bank statements for the years that you worked in Germany. You can ignore this but they have the powers to gain this information via the courts.

Not in UK. Meaning that f-amt can not get UK banks disclose anything.

This could be only a concern if f-amt finds out (usually during a raid) your UK accounts and ask you to disclose details of specific account numbers.

(so that's why it's recommended to not carry UK bank cards with you in case you raided and not to make any swifts from/to your UK account to/from your German account, since these will make your foreign account visible to f-amt)

You may choose to not disclose it, however, you may loose some ground before the judge/court.

Meanwhile, it's not wise to keep money in your UK account neither, since sooner or later it will be HMRC's concern.

I also witnessed some UK banks are very understanding and trying to protect their loyal (and rich) customers, so they MAY issue a letter stating that transactions older than 2 years are not visible / destroyed / inaccesable. It's up to you and your personal relationship with branch manager to sign anything you want from him/her.

[SalsaFever]

I've now received a letter from my German accountant stating that I might be charged with tax evasion and that to avoid this I should come clean now. What to do?

Hi Poppy,
It sounds very familiar indeed! Nowadays I hear similar stories which I find quite interesting:

Story goes like f-amt calls your accountant and tell her you were doing nasty things and there is an investigation about to be started and you are in great danger. Then f-amt guy advices you should file a self-correction ASAP, so you don't get criminal record and that's the only way you can come off clean.They usually give you a deadline and do follow up calls to your accountant.

First, this is illegal -or at least unusual- and weird from f-amt point, to tell someone to file self-correction to avoid an investigation. By law, if they suspect something and have proof, they should investigate.

Besides all this self-confession/self-correction thing is based upon the fact that you should do self-correction before f-amt realise you are being naughty.

So the answer is simple.

F-amt does not have enough evidence to take you court or even get a search warrant (or search warrant is irrelevant you are not in Germany anymore)

So they stuck with some invoices from client to albany or client to the uk agency and they can't prove anything with that.

So their only option is to play a poker game and bluffing that they have clear evidence against you and they love you so much, they don't want to harm you bull tulip..

The fact is that If they had some clear evidence, they would come and rape you, then scalp your head, then hang you and get quartered before public. They are quite merciless if they seize the opportunity.

So if the amounts are insignificant and you can afford it, just do the self-correction and come clean.