The English taxman has targeted Italians with homes in Great Britain. The hunt has started for those who reside in the United Kingdom, have a property in Italy, but have never declared it in England. Even though he has paid his taxes in Italy, for the British outside of Europe he is a “tax evader”.
Letters from HMRC
A shower of letters from is coming to the letterbox of fellow citizens living in Great Britain HMRC, abbreviation that stands Her Majesty Revenue & Custom, the English Revenue Agency, such as the one dated 25 February and arrived in Paola (the name has been changed for privacy), which Il Sole 24 Ore was able to view. The tone is very dry and categorical: “We have information showing that you have received income or earnings abroad, on which you must pay taxes in Great Britain.” Paola lives and works in England, has three properties in Italy, never declared overseas. The case history is huge: 700,000 Italians live in the United Kingdom “Official”, those registered by General Consulate in the Aire list, but the actual number is higher. And many of them, even the young boy who is a bartender from Black coffee O Costa Coffee, have a home in Italy, often inherited or donated by their parents: Italy is the country with the highest rate of home ownership in the world. And when they moved to England, they all rented out their properties. They may even have paid taxes on that rent in Italy, but that’s not enough. And now the English taxman is going to track down all the property owners one by one.
Side effects from CRS
It is not a fury against Italy. But one of the side effects of the legislation CRS (Common Reporting Standard), introduced byOECD (international body that brings together all developed countries): the obligation to communicate the bank details of foreign residents to the tax authorities of each country. It is enough for a country to cross-reference the data to see if any citizens have “hidden” incomes somewhere in the world. It is not enough for Her Majesty’s tax authorities to have paid taxes on income from real estate in Italy, it is also necessary to have them included in the Tax Return, the tax return. The British, who are methodical in the management of the state, went alphabetically with the application of the CRS legislation: they started from the letter of A of Albania and now they have reached I. And after having sent letters to the citizens of India and Ireland who live in the UK it is Italy’s turn: routine tax control, however, has become a “case” because Italians are the third nationality in the UK after Poles and Romanians; London is the fourth Italian city by population.
The letters threw thousands of fellow citizens into panic. It is the opposite case to that of the IMU sting in the UK: with Brexit, Italian residents who have a property in the UK have experienced a surge in the Italian house tax. In the case of HMRC, however, the tile falls on Italians residing in the UK for the houses they own in Italy.
Upside and downside of the real estate coin: in any case, it’s super work for Italian tax and accountants in London: “We are receiving dozens of requests for help – he begins Guido Ravaglia of the Stature study – Before it was anti-economic for any country to go in search of these incomes, an activity too strenuous for often modest amounts ». Now it is the banks that automatically send the data to the countries. For Her Majesty’s taxman it is easy and convenient. “Many compatriots have never declared income from Italian real estate in the United Kingdom,” Ravaglia continues. In many cases there is good faith, in others there is superficiality on the part of those who advised Italians in the UK: the general principle is that houses and apartments are always taxed in the country where they are, precisely because they are real estate. And the presumption of the prohibition of double taxation, that is, that you cannot pay taxes twice, has led many Italians residing in Great Britain into error, to think that it was not necessary to declare those incomes already taxed. An error that now risks being costly: in addition to the shortfall (for the English tax authorities, those Italian incomes are tax evaded), there is also a penalty that is often 100% of the unpaid tax. If the British tax authorities suspect there has been one frode, and not a trivial mistake, part a criminal trial: “The timing and costs of a criminal investigation are very significant, so each taxpayer should check any undeclared income and rely on a professional to assess their position and any critical issues in more detail” he advises Alessandro Belluzzo, founder of the Belluzzo International in London. Who warns: “Do not underestimate the letter received.” It sounds like a good-natured warning, but it’s not.