Let justice be done

I don't usually know what your average Spaniard is talking about as they chat with the neighbours, keys in hand outside their house or have a drink after work in the bar. It's easy enough for me to ask real Spanish people real questions but asking for answers isn't the same as knowing what people talk about spontaneously. Of course the traditional media, newspapers, television, radio and the social media probably reflect what's going on in the street but not necessarily so.

There has been one constant in the news for months. Cataluña. Every morning as I do those things that you do in the morning in the bathroom listening to the radio and as I move to the kitchen for my breakfast tea and toast I hear the pundits sounding off about Cataluña. There are lots of other things in and on the news but Cataluña just keeps coming back and back. Maybe they should start to have a section for Cataluña similar to the sports slot or the stock market updates. I have no idea about Cataluña; it's a political quagmire which causes apparently intelligent people to behave like children. I watched a Netflix documentary called Two Catalonias (it  was in a number of languages but the subtitles that held it all together were in Castellano so I suppose that if you watched it in the UK the subs would be in English). Every time someone made a point pro or anti independence the next section would have someone making exactly the opposite point using the same facts or events. I have never seen a documentary like it. I've never heard a debate like it. What seems to be happening is that people choose their viewpoint and then select facts to support that opinion.

But for the past few days Cataluña hasn't got much of a look in. Back in mid October the Supreme Court ruled that a tax on mortgages, called the actos jurídicos documentados, a sort of stamp duty collected by the banks and passed on to the Regional Governments, should be paid by the banks and not by the people taking out the mortgage. The duty varies from region to region; for instance it's twice as high where we live as in Madrid. Looking for an illustrative figure it seems that in Alicante you would pay around  2,250€ on a 150,000€ mortgage. There were lots of arguments about the sums but the loss to the banks was reckoned to be about 5.5 billion euros and it didn't do their share prices any good at all.

The day after the court decision a senior judge provisionally halted the judgement from taking effect and two days after that the top judge in the Supreme Court decided to call all the Supreme Court judges together to decide what to do. In the meantime nobody wanted to sign off on their mortgage and everyone with a mortgage was looking forward to getting money back. The judges meeting, which lasted two days, finished a couple of days ago and their worships decided by 15 votes to 13 to continue the system where the person taking out the mortgage paid the duty and not the banks. The headlines were all along the lines "Banks 15 The People 13" or "The Banks win". The Social Media exploded with indignation and I didn't need to go anywhere other than the supermarket queue to know what the trending topic in the street is today.

Tax burden

Today is the first day that we Spanish tax payers have been able to sort out either under or over payments in the 2016 tax year. The Spanish tax year is the calendar year.

Everyone, resident in Spain, who earns over 22,000€ or has more than one source of income, has to make a tax declaration. If you earn money from more than one source you don't need to make a declaration if you earn less than 12,000€. The declaration is on worldwide income. What happens is that the tax office, Hacienda to you and me, sends out a thing called a borrador, a draft assessment. Once you are on the website you can check if the borrador looks fair enough. If you have just one job with one salary and things are pretty much as they were last year you may have to tweak a few things but, chances are, that the borrador will be close to the truth. For quite a few years all I did was to have a quick scan and press the accept button because Hacienda usually sent me back a few euros.

If your situation is a bit more complicated you can, of course, buy yourself the services of an accountant to help you fill out the form. I had a short period of being self employed and so I used an accountant, un asesor, for a couple of the declarations. The other option is to book an appointment at the tax office and go and get them to help you fill in your tax declaration. I did that at the beginning when the online version didn't exist. I also did it when I first had problems with the tax on my UK pensions. I reckoned that if a civil servant filled in the form it was much less likely that I would get a late night visit from some heavily armed tax officials keen to check my deductions.

My pension has been a right pain tax wise. It's paid in the UK. Part of it is a Government pension (the sort that police officers, the military, civil servants, teachers and the like get) and part of it is private. The Government Pension, under EU arrangements, has to be taxed in the UK. In the past the Government Pension didn't have to be declared in Spain. The amount was less than the UK tax threshold so, although it was in the UK tax system, I didn't actually have to pay any tax on it. The private bit, and that amounts to less than £400 per year, comes from AVCs. Although I nominally pay UK tax on that income too I have always known that it should be declared in Spain as part of my worldwide income. I didn't think though that even the meanest of mean tax officials would be worried about a piddling £400 earned and taxed miles away. I didn't bother to sort it out. It was pure, one hundred percent, sloth. I don't even have my usual excuse of worrying about speaking Spanish. The UK tax people must have grassed me up to the Spanish Hacienda and the Spaniards came looking for their unpaid tax. I was actually able to take advantage of a tax armistice to pay the back taxes I owed without any penalty but I did need to pay an accountant to sort it out.

Then some Spanish tax laws changed. Although Government Pensions remain taxable in the UK they now have to be declared as a part of my income or that of anyone in a similiar situation living in Spain. Were the situation to be that tax was due on that pension in the UK then Hacienda would knock the amount paid in the UK off any amount due in Spain. The system still avoids double taxation but it also did away with advantage that UK residents in Spain got from both the UK tax threshold and the reduced rates for people on low incomes in Spain.

So the borrador was available online today. Hacienda has a new computer programme this year and it has been widely billed as being easier to use. I agree. It was a lot slicker and a lot easier to understand than the older system. As soon as the system fired up it asked me how much I'd earned on my UK pension. I told it. I boldly clicked, I wasn't worried because I thought I was pretty well sorted, tax wise, nowadays. I insisted on legal contracts for both my teaching jobs and, without doing the sums on the tax deductions, I presumed that I was paying my tax bill every month from my salary much as people do in the UK with the PAYE system. I was wrong. For some reason one of my two employers appears to have paid none of my tax and the other seems to have paid at some discounted 2% rate. The lowest Spanish tax band is 19%. Basically then I've only paid a tiny fraction of the tax bill on my teaching work and none of the tax bill on the two UK pensions. When I pressed the button the shiny new computer system told me that I owed the difference. I felt nauseous as they say in Hollywood.

I'm not going to say how much the tax bill is because it would be dead easy to work out how little I get paid and that would be embarrassing. Suffice it to say that it would take me two months of teaching to earn enough to pay my outstanding tax. It was a bit of a shock to the old system I tell you.

What that Franklin chappie said

I don't really mind taxes. That doesn't mean that I like handing over my hard earned but I approve of the idea. I'm much keener on the model where we pay the taxes and, with them, our governments attempt to provide healthcare, education, infraestructure and all the rest than I am on the model where everyone looks out for themselves and to hell with the rest.

Anyway. For the past six years or so I've been getting a pension from a final salary pension scheme that I paid into for most of my UK working life. Because that money comes from a quasi government source the agreement between Spain and the UK was that it was exempt of Spanish taxes but taxed, at source, in the UK. Normally Spanish residents have to pay tax on their worldwide income here. In reality my pension is so small that it has never exceeded the personal UK allowance so, although Customs and Revenue send me coding notices and I get P60s and what not, I don't actually pay any tax on it. I also have a pension top up from some secondary UK scheme that I paid in to. That produces about £360 a year. That money is declared and taxed in Spain.

This being taxed in the UK had an advantage. It gave me two lots of personal allowances - one for the UK and one in Spain. Of course the tax people realised this and for the 2015 tax year - the tax year in Spain is a normal calendar year - they closed this "loophole". We are now sorting out the 2015 tax bills. The amount of my UK pension now has to be added to my Spanish earnings. The principal of no double taxation is maintained because any tax paid in the UK would be deducted from my Spanish tax bill.

I had a slightly complicated tax year in 2015 because I was technically self employed for a while. I'm having to use an accountant to sort it out rather than just accepting or amending the online draft tax declaration that the Spanish revenue people sent me back in April.

The accountant I use sent me a WhatsApp the other day to say it looked like I owed a bit less than 400€. This is not good but it's not heartbreaking either. It did make me wonder about the people who have decent pensions from the UK though: the ex police, ex military, time served civil servants etc. I've just had a quick look and it seems that the UK personal allowance is around £11,000 so if that suddenly becomes taxable at a mixture of the starting Spanish rate of 19% plus the portion that goes into a higher bracket charged at 24% (and my arithmetic is correct) then they are going to be facing an extra tax bill of just short of 3,000€.

I suspect that could be a bit of a hammer blow for lots of the pensioners here.

Professionalism

It's probably some sort of jingoism on my part but I can't say I'm that impressed by the professionals that we have occasionally used here. By professionals I don't mean doctors or mechanics or plumbers or builders. They seem fine or at least just normally inept. No, I'm talking about the sort of people who work from offices and should wear suits - architects, lawyers, accountants, bank workers and the like.

A friend of ours was going through a divorce. The lawyer forgot to tell her that the divorce had been granted. Right on the ball then?

When we first got here we hired a lawyer to sort out our residence papers. We thought we could do it ourselves but to avoid hassle we paid a professional. Unfortunately the lawyer was completely unaware that the legislation was changing. He went through the tried and tested process but, by the time we went to collect the documentation, it no longer existed. We'd paid upfront. There was no talk of a refund. We did the correct paperwork ourselves.

As a part of some half hearted anti money laundering legislation everyone has to prove that they are who they say they are to their bank. This has to be done in person at a branch. The legislation was introduced in October 2010 leaving over four years for the banks to collect the information. In the last few weeks the banks have been in some sort of blue funk trying to get an extension on the implementation date at the end of April. They seemed to have forgotten to tell anyone. I read it in the press. This really is leaving your weekend homework to the school bus on Monday morning.

Last year the tax office caught up with some untaxed pension income of mine. I went to the Revenue to sort it out with my annual declaration. I wanted to correct any underpayment in previous years too but the Tax Office said that was a job for an accountant. I'd gone directly to the Tax Office because I reckoned that if they made a mistake at least it would be an "official" mistake. Anyway, following their advice I went to an accountant in the town where I was living. He told me there was no past tax liability - I was in the clear. The man did not fill me with confidence though. He used a calculator for the simplest of sums, He made lots of ooh and aah sounds as he stared at his computer screen. He kept reaching for his fags before remembering that it's no longer legal to smoke at work. He wasn't Cockburn's Port.

This year I have to have an accountant as I am self employed. The first thing my accountant did on my behalf was to register me as self employed. I knew it had happened because the Social Security confirmed it in a text message and took money from my bank account. They took 40% more than the accountant told me they would take. I heard nothing from the accountant though, not a dickie bird. When I went to see him a month or so ago I asked for the self employment registration certificate. "Oh, haven't we sent it you?," he said. 

The tax people don't seem to have forgotten that I get a UK pension. They sent me a letter offering an amnesty on any unpaid taxes on pension income to foreigners like me - no interest, no fines, just the normal payment of any unpaid back tax. My new accountant didn't seem to want to see the letter that the Tax People had sent even though I said that it talked about a new process, a special form. Unlike last year's accountant my new accountant is sure I owe the Revenue something.

Today, when I sent a WhatsApp to ask him when I might see the paperwork that they were going to submit on my behalf  he replied by phone. I've told him that I try to avoid technical phone calls in Spanish preferring emails or other written options. He told me there was a specific form that had to be completed in my case. The Tax Office need to send the form to me so that in turn I can send it on to the accountant. I presume this is the special form mentioned in the letter that he didn't want to read. Before he rang off he said he just wanted to be sure that he had my correct postal address. It was perfect except for the street, the PO box and the town.

He thinks we should leave the submission till the last possible day. That sounds like the perfect strategy to me.

Evading tax

I got a letter from the tax people yesterday. Now letters from the tax people are not written in normal, everyday Spanish. They are Brontesque in style. With the envelope ripped open and the single page scanned it looked bad. There were lots of words I didn't understand but it was clear that the Revenue, Hacienda, were unhappy about the tax I'd paid on my pension. Tax people can be nasty. Tax people take your house and send you to prison when you're naughty. Unless of course you are very, very rich in which case they are extremely nice to you.

I explained my situation last year in a post on Life in La Unión Just a quick recap. Normally, if you are a Spanish resident, your worldwide income is taxed in Spain. However, I have a local government pension from the UK and there is an agreement between Spain and the UK that government pensions are taxed at source, in the UK. So far so good but where I turn into Al Capone is about my additional voluntary contributions. They provide an additional pension of about forty quid a month. Rather than declare that cash in Spain I simply left it in the UK tax regime. I shouldn't have done. I should have declared it in Spain.

The financial year in Spain is the calendar year. Sometime early in the year, March I think, Hacidenda do their sums and decide whether you owe them money or they owe you money. In 2014, for the tax year 2013, they caught up with me. I came clean and paid the unpaid tax. It was about 70€. The tax office said that to sort out the same underpayment for 2009, 2010, 2011 and 2012 I'd have to go to an accountant. So I did. I just chose an asesor at random in the town where I was living, La Unión and asked for advice. To be honest the accountant didn't exude reliability but he told me that I earned so little in total that it was all straightforward and I didn't need to do anything. No fines, no clink and no public humiliationn coming my way.

So when I got that letter I started to curse the accountant and think bad thoughts about the man from the Prudential who sold me those worthless AVCs too. Ten minutes later though with a more careful reading of the letter, and only needing to look up two words as it turned out, I realised that the tax people were actually offering an amnesty to we foreigners who hadn't paid up on our pensions. They mentioned the special circumstances we are under i.e. we don't understand the lingo or the culture and we have no idea what's going on. We have till June to sort it out.

Now I have an accountant because I am technically self employed. I phoned him. No worry he said. If it wasn't sent registered post it isn't dangerous. We can talk about it when we next meet.

Thinking about it this letter is actually good. It's a general letter. The accountant in La Unión could be right and it could be that I owe no tax. It could also be that the accountant in La Unión was wrong and I do owe some tax. However, with the amnesty there will be no fine and no interest to pay so the worst it could be is four times the amount I handed over last year or thereabouts. But the best thing is that Hacienda has a process for sorting this out and once I've filled in the appropriate forms and paid any debts it will all be nice and starightforward.

And I do value a quiet life now I'm in my dotage.

Nothing in particular

It's raining. It's rained quite a lot in the last couple of weeks. We've forgotten all about the drought which lasted from last winter through to a few weeks ago. Usually, though not today, it rains overnight which is very civilised. I can't pretend that it's warm but it isn't cold either - at least not outside. Generally we're into the mid to high teens during the day but with sun and blue skies so it feels pleasantly warm. Overnight we're down at 7ºC or 8ºC maybe. I expect it will turn cold in December, it usually does. The pile of leaves that have just started to clog our drive suggest that Autumn has finally arrived. And its getting dark just after six in the afternoon. Considering it will start to get lighter again just before Christmas that's not too bad. So outside, in the fresh air everything is as it should be. Inside the house of course it's miserable. On the front page of today's Alicante paper there's a headline which says that nearly half of the houses in Alicante province lack any form of insulation against sound, heat or cold. This statistical information is tied in to the introduction of energy efficiency certificates for dwellings a while ago. In our house the little windows, designed to keep out the beating sun of summer make our rooms dismal in winter and the uninsulated house with tiled floors, painted walls and badly fitting doors make it exactly the opposite of cosy. With the log burner alight the living room has been lovely and warm but all the adjoining rooms have a cold, musty feel. Getting into bed is quite unpleasant until you stop shivering.

In the news, corruption stories are everywhere. The health minister resigned this week. She was mentioned by a judge as being the direct recipient of goods bought with her husband's dodgy money. I heard lots of comments that it was like making the poor thing resign for having eaten poached game when she didn't know it was poached. Hmm. The same judge said the ruling PP or Conservative party had benefitted directly from dodgy funding but the health minister's boss, the national president, forgot about that when he stood up in parliament and said that corruption was not endemic. The last three PP party treasurers have all been in court, one is on remand and that one has accused the current president of taking illegal payments. I wouldn't like to give the idea that only the PP have their fingers in the till. Certainly on percentages they come out top but, down in Andalucia, there's a huge corruption deal about suspect redundancy notices which implicates two past PSOE or Socialist party presidents. And the independents don't want to miss out either. In Cataluña an almost mythical ex leader turns out to have a stash in Andorra and there was a case of illegal party funding a while ago that another key political figure somehow seemed to sidestep.

Back to our national president; he's a very strange president. Earlier this month a couple of million Catalans turned out for an illegal referendum on independence - the national president generally ignored that and sent something akin to the Crown Prosecution Service (if it's still called that) after the regional president for running an illegal poll. So much easier than arranging to talk about it. He's behaving the way I do when I need to talk to someone in Spanish on the phone. Anything to avoid a difficult conversation.

There are close on 2000 politicians currently charged with some level of corruption yet none of the promised anti corruption legislation has got past the committee stage. The politicians don't go easily either. None of them behave like people convicted of crimes. No sackcloth and ashes. Most of them spin out the process for ever with iffy legal arguments and expensive lawyers. The few who have been locked up argue about which prison they'd like. An ex president of one of the regions was in the sort of prison regime where you go home for the weekends and only put on your stripey suit every now and again. When people found out they got a bit indignant so a judge decided to withdraw those privileges. The ex politician appealed the decision. Another ex regional president who has been sentenced to four years in chokey still has body guards and an official looking car and has been asking the Central Government for a pardon - a real live get out of gaol for free card.

Yesterday I got a text message from the General Treasury of the Social Security on my phone to tell me that my petition to become a self employed person had been approved. In the past I've complained about the difficulties that people face who want to set up their own business here. People needed to have a hefty amount of cash behind them in the bank or at least some heavyweight backers willing to cough up if the business went pear shaped. Social security payments were high too with even the smallest business subject to a 260€ minimum payment from the first day of trading and before any tax committment. Anyway, for my new job, my new boss suggested that I should be self employed. This only made sense because now there is a sort of reduced charge sliding scale social security payment scheme starting at around 53€ for the first 6 months and then going 130€, 180€ and finally 260€ after two years. I thought it sounded like a good scheme. An incentive to get people to register and run legal businesses from the start rather than to start illegally and register only when the profits justified it. Nonetheless in my case I thought it sounded a bit flaky and there were plenty of disadvantages as well as advantages but the accountant told me that at least it was all legit. He did all the work. All I had to do was to sign on the dole and hand over some basic ID documentation and he did the rest. Then a text message. Nearly as strange as our president.

Separate to save

Apparently, on average, we Pinoseros - the population of Pinoso - produce 500 kilos of rubbish each year. Of that just 28 kilos is recycled.

Rubbish collection isn't done on an individual basis as in the UK. Instead there are big rubbish bins placed at strategic positions in the villages, towns, cities and throughout the countryside. Individual householders have to carry their household rubbish to the bins. Collection in the towns is usually every night whilst in Culebrón collection is twice per week.

There are recycling bins too. Generally it's green for glass, blue for paper and cardboard and yellow for containers. There isn't discrimination within those three categories so the empty shampoo bottles, the tetrapaks and pop cans all go in the yellow container. Green, blue, clear and brown glass all go in the green container.

I'm told that people have jobs separating the different classes of waste but any time I've ever talked to Spaniards about this the majority firmly believe that it's all a big con and that all the rubbish destined for recycling is just dumped in the landfills or incinerated along with the rest because it simply doesn't make economic sense to separate the individual items.

Anyway just before the summer proper got underway big posters went up all over Pinoso "We have a plan" "Separate to save" The thrust of the campaign was that we could keep the rates down by recycling more.

One part of the plan was to provide households with bags colour coded to the different containers for home use. I tried to get some when the plan was launched but the office was closed whenever we were in Pinoso. When we came back for summer I tried again but they had run out of supplies. Yesterday I finally got hold of a set.

We've always used a couple of big rubber buckets to keep our recyclable stuff in but the new bags are much smarter if significantly smaller.