An American in Britain

We used to do our own taxes on paper. But when the children were born, we found that we might have extra deductions and were confused about them. That’s when we decided to buy TurboTax to help with our tax preparation. However, after a couple years, we switched to H&R Block’s TaxCut because it was cheaper. We found no difference in the quality of the software. After many years of doing our taxes via software, and filing electronically in the last couple years, it seems we have forgotten many basics about tax preparation. And what we have just realised is that using tax software was completely unnecessary.

We’ve made our mistake and I worry that we will have some difficulty in rectifying it. It was easy to go along with all the hype that TurboTax and TaxCut want you to believe – that you might be doing your taxes wrong, you might be missing out on deductions, etc. They will help you through all the new legislation, blah, blah, blah. All you have to do is punch in the numbers and data they ask for and they do all the work. In later years, you can import data from the last return. They made it so easy. But then I realise I had done our taxes by hand previously. Yet, when I look back at the paper files we had, I find that I cannot understand how we did it back then. This year, we may have to go back to paper filing and I find the task almost daunting as we have been pampered in the last several years.

Yes, there may be many advantages to using tax software. For example, it is true that they update their software (even while you’re using it) to encompass any new tax legislation that come out during the tax year. And, some even offer tax help or advice via phone or email. Both TurboTax and TaxCut have different versions, with different levels of service from Basic to Premium. We were fooled into getting Premium one year, but found it was unnecessary and have stuck with Basic since. All that nonsense about getting the DeductionPro as an added benefit to either program is a waste for most people. We recently found TaxCut also has a Standard, which is cheaper than Basic. I do not have all the details but I believe it may be because the DeductionPro is not included. Do you need DeductionPro? As I said, for most people, no. To determine if you do, find out what your standard deduction is for the tax year. If you think that your gifts, donations and contributions to charities, etc., for the tax year exceeds the standard deduction, then you will want DeductionPro. This program allows you to itemise all your deductions to maximise on your refund.

In preparing for the tax season this year, we also found some free online software. One is available through H&R Block. However, in order to use it, you must answer all questions in sequential order according to what they want. Although they claim they can use your international address, the software did not accept our responses. We had to put in fake details in order to get through the program and see what our refund would be. It’s a nice way to get a preliminary. There may be others like this out there but we have not explored all of them yet. We also came onto the IRS website and found that they have two free online options. One is free software, which you need to download from one of several companies. This option is only available to those who made less than $56,000. The other option is essentially a blank IRS form which you can go through and fill in, then file electronically. This is sort of a ‘help-yourself’ option as it only offers help by having you scroll through the instructions. If we are unable to find a software that can support our international address, we will be forced to use this option. We would rather file electronically as the refund gets deposited into our account directly and quickly. Paper filing would mean they would have to cut us a check, mail it to our international address, then we’d have to mail it back to our bank.

Of course, to even complete the task of filing, I will need to dig into our boxes and find our last year’s return. That will be a task unto itself.

It seems that spring comes much earlier here. The days have been getting warmer, although the last few days have felt a bit nippy at times. The flowers are growing. Every spring I anticipate seeing them, and the snowdrops and crocuses have lived up to expectations. Not only that, the daffodils have come up, though they have not bloomed yet.

If I were in the US, I know that I would be speaking too soon. Very often, we would get a spring snowstorm sometime in March. It never seems to fail. Yet, the weather has been too nice for me to believe that any such thing would happen here. I will have to wait and see. For now, I am content and look forward to spending time outdoors again.

Tax time again. Just got my W-2s, so I’ll have to get down to filing that return. Unfortunately, I’ve already run into some obstacles. The first is that we now have an international address and that may cause problems. And until we resolve those issues, we cannot file.

Yes, even though we’ve moved out of the country, we still have to file taxes. Our reason is obvious, though. We are expecting a refund. However, even if we weren’t, they recommend that we do. This is to ensure that we will be able to claim deductions in the future. Apparently, expatriates are not aware of that. However, their website does state that those expatriates who want to make up for the past should download the last 3 years of tax forms and start filing. There are no deadlines and they will not be fined. In addition, the filing deadline each year for those living abroad is automatically extended until June 16^th. Nevertheless, if you owe money, it needs to be sent by April 15^th. If you cannot file by June 16th, you must submit a request for extension by that date, in order to extend the deadline until October 15^th. They will accept whatever date is postmarked on the envelope as the filing date.

Expatriates need to also be aware that if they live and work outside the US, their income may be liable to taxation from both the US and the foreign country. The current level of income that is excluded from US taxation is now at $85,700. Anything above that would be liable for US taxes. However, when you file, you may be able to claim foreign tax credit – that is, you may be able to deduct the taxes that you paid towards the foreign government. For more information, you should contact a tax advisor at the US embassy.

I think the real killer in this taxing business is the exchange rate. It is not based on the current exchange at all, but on the rate in 2007. For example, the UK exchange rate is currently at $2.0018 per pound sterling. That means, if I earned 40K in the UK it equals a little over 80K in the US, rather than closer to 60K, at the current exchange rate. Only a few more grand and I would be liable to double taxation. Fortunately, or unfortunately, I am currently unemployed.

Some people may be confused about which forms to fill out for filing their taxes. The simple rule is to assume your status in the US prior to living abroad. That is, if you are a US citizen or if you had been a resident alien, you should file Form 1040. If you were and are a US nonresident alien, then you use Form 1040NR. Nonresident status only applies to those who were not given full residential rights, such as temporary students.

Finally, if you choose to file your taxes on paper (we have not done this in years), you may either turn it into the US Embassy in London, Paris, or Frankfurt (depending on where you live), or you may send it to Austin, Texas. And, if you have any questions, the US Embassy may be able to answer them. Or, if you were as lucky as I was, you will get a message stating they are understaffed and you may not have your call answered. They will instead direct you to call their Philadelphia office. I wonder what their walk-in service would be like.

Every country has its unique group of wildlife. Although they may have many of the same animals present, the number varies; therefore, you might find animals in the UK that you rarely see in the US and vice versa.

Take for example, the gray squirrel. When I first came to the UK, I was informed that the gray squirrel had practically ran off the red squirrel. That may have been the case years ago, but some people had decided to save the reds and new colonies are appearing. But the most interesting fact is that the black squirrel has suddenly been introduced. Authorities have now discovered that they came from American squirrels who escaped from the zoo (which zoo?). Black squirrels are not very common in the US either, but they are prevalent in certain areas, such as Ohio.

Deer are very common in the US – you usually see them splattered about on the highways; although occasionally, you might be lucky enough to dodge them. We have not seen many dead deer here, but we have had whole families crossing the road almost oblivious to traffic. We also see herds of them grazing off the farmland. We know some farmers don’t appreciate that. I don’t believe they are hunted here as they are in the US.

The animal most likely to be hunted is the pheasant. We came upon a truck full of farmers and hunters, and dead pheasants loaded up on the side. Most likely, they were on their way to the local butchers. The pheasant is an interesting creature. Although it can fly, most often it chooses not to. Rather, it will duck its head forward and race out of your way, almost like a road runner. Pheasants are also most likely to be the road kill over here. That is in contrast to squirrrels, raccoons, deer, cats, dogs etc. in the US.

Another road kill that I have never seen in the US is the badger. They are usually nocturnal creatures, although occasionally, they may venture out during the day. Or, driving at night, you might just pick them up in your headlights.

For me, though, the most interesting animal is the fox. Yes, foxes are common in the US, too, but I have never had any experience of them. Without putting myself in their way, I have learned a few things about the fox that I would not have learned in the US. For example, the fox’s urine stinks almost as bad as a skunk’s deadly spray. We learned this after walking out of my in-law’s garage. My husband and I noticed a skunky smell, but it seemed rather confined. We saw a small yellow puddle nearby and my father-in-law informed us that there were foxes in the area that liked to leave a little of themselves in the neighbourhood. Another distinctive feature is the fox’s bark. The first time I heard it was when we were staying at my in-law’s (in the London area). I thought it was a baby crying until my husband informed me that it was a fox. More recently, I heard a very harsh cry, almost like a crow being mauled. It was eerie and spine-tingling. When I tried to explain it to my mother-in-law, she told me it was the fox’s mating call. Unbelievable. If I heard that call, I’d be likely to run the other way.

Other interesting animals that I have seen briefly and would like to know more about are the different species of waterfowl. Outside Arundel Castle were more-hen and coots. There were others that we have not identified and will probably need to bring some kind of guidebook. More for later then.

Arguably no country has done more to spread global democracy and personal liberty than Great Britain. However, the whole concept of a TV license and its enforcing authority reeks of indirect, petty, restrictive nanny-government involvement in an area that should be outside of its remit.

It is hard to believe but in the UK, it is mandatory to own a license in order to watch television. In fact, it is a criminal offence if you watch television without a license!

Imagine our surprise when within a week of moving in to our house we received a threatening letter from the TV Licensing Authority stating their records indicated no TV license on file for our address (the letter also emphasised the penalties – 1000 GBP plus costs – if we owned and used an unlicensed TV).

Of course, we own no television set and see no reason to own one if it is going to be taxed at a rate of GBP 140 per annum. So, we wrote back with a short, sharp response indicating we neither own nor plan to own a television. Shortly after, TV Licensing wrote back with another emphatic statement regarding criminal offences and penalties, and that we should expect a call from enforcement officers to determine whether or not we do need a TV license. This was about three months ago now and we have yet to hear from TV Licensing again.

Despite the aggressive, heavy-handed manner in which they are enforced by TV Licensing, it is worth being aware of certain aspects of TV licensing in the UK. Here is some information we have found out recently.

TV Licensing is essentially a subcontractor performing the BBC’s dirty work. They say that you should own a TV license if you watch TV in the UK. There are few exemptions (such as the over 74s). The license is renewable yearly and from April 2009 will cost a whopping GBP 139.50. Even if you do not own a TV but watch programs on the internet as they are being broadcast live on TV, you still need a TV license. If you own a TV but only use it for watching DVDs and videos then you can inform TV Licensing of the arrangement and they may grant an exemption.

We have not been able to find out the answers to these questions:

Do I require a license if I use my TV to watch only non-BBC television programes. (Why should you subsidise the BBC for watching Sky or other services you have already paid for?!)

Surely, it is only a matter of time before the anti-TV licensing brigade gain sufficient momentum to take a case to counter this unfair indirect taxation before the European Court of Justice.

Though I may complain about the long and winding road, one thing I’ve noticed about the roads here is the lack of pot-holes. No, I don’t miss them, and never will. Having said that, I will admit that the recent snowstorms did create a couple holes on the road that were not there previously. However, it is no where near the extent I noticed on a regular daily basis in the US.

On previous trips as well as when we finally moved here, we have always travelled on smooth roads. Even in summer time, I did not see those orange cones indicating that road work was in progress. This is very different from the US, where it seems construction work stretches from year to year, usually commencing in the summer and sometimes not ending for several years. On some roads, the construction occurs every summer. On others, pot-holes are temporarily filled in, with re-paving occurring every2-3 years. The only times I have seen the orange cones over here are when they need to dig up for new piping or wiring, etc.

The few pot-holes I’ve recently encountered have been filled in, but whatever it is they use, it does not seem to dislodge when you drive over them, like they did in the US. It makes me wonder if the materials used over here are somehow stronger than in the US. It may help explain why they do not get the same level of damage. Or, perhaps there is less traffic overall. Or, could it be because the weather is much more temperate here, less likely to have extreme changes within a very short period. Whatever the case, I appreciate the lack of pot-holes. It would be very dangerous driving and dodging pot-holes. Especially when going down those extremely narrow country lanes with tall hedges obscuring your view of any oncoming vehicles.

Although second nature to most Brits, to Americans the stages involved between buying a car and getting it on the road can seem quite convoluted. 

Once you have picked a car and decided to part with your money, there will be three additional items (and consequently expenses) you will need to consider:  road tax, MOT test and insurance.

The MOT test is a roadworthiness test used in the UK on vehicles over three years old.  It tests the safety, roadworthiness and exhaust emissions of vehicles, and is not a test of the vehicle’s mechanical condition (your car could breakdown on the way home from the MOT test center following a successful MOT test.)  The MOT test must be carried out at one of the UK’s registered MOT test centers and usually costs in the region of GBP 50 (for a standard car).  Cars over three years old must have annual MOT tests.  It is illegal to drive a non-exempt vehicle on public roads without a valid MOT test certificate.  Also, your car will need to pass an MOT test before you can purchase a road tax disc.  The test is more thorough than the state inspections used in some US states (at least, in our experience).

If you buy a secondhand vehicle, then there may be several months remaining on the MOT test certificate.  If this is the case, you will not need to have your vehicle tested until the anniversary date of the existing certificate.

Once your MOT test is taken care of you can proceed to get a tax disc.  The tax disc is akin to the US vehicle license and registration, but for most, other than very new economical cars, it is more expensive (usually upward of GBP 100, and can be as much as GBP 400).  You can get a tax disc at either the post office or a local DVLA center.  Any vehicle used or just parked on public roads is liable for the tax, and stiff penalties are in place for those who do not hold a current tax disc.

If the dealer from whom you buy your car has a “documentation fee” then you should ask him what this covers.  We have found that it usually means he will walk down to the local post office and transfer the tax disc to your name.  For this he may charge you about GBP 50.  It’s something you can do easily yourself.

Similar to the MOT certificate, if buying a secondhand vehicle, the existing tax disc may have several months left to run. 

The third and final requirement for getting a car on the road in the UK is valid motor insurance.  There are very many insurance brokers in the UK, so be sure to shop around.  If possible, avoid brokers altogether and talk directly to an insurer.  There are several insurers that deal directly with the public.  Direct Line is one, there are others.  We very strongly suggest you talk to these before making a decision on your motor insurance;  it could save you many hundreds of pounds per year. 

Be very wary of the current fad of insurance comparison sites.  In our experience, these do not always list many inexpensive insurers and are mostly a vehicle for brokers to ply extra trade.

If you plan on driving on your US or overseas license then you should expect a hefty annual insurance premium (likely to be upward of GBP 1100 per year!)  from high street broker sold policies.  You might have  no choice but pay exaggerated premiums for 12 months until you establish a driving record in the UK.  However, if you have a clean insurance record in the US then read on!

UK motor insurance has a “reward” system based on the concept of “no-claims”.  For each full year you drive without an insurance claim against a UK insurer you earn points that give discounts on premiums for subsequent years.  This is no good if you have spent the last 5 or 10 years driving in the US!  So, why am I telling you this?  Well, if you talk directly to an insurer (such as DirectLine) they might be willing to honour your clean insurance record from overseas.  If you have, say, 5 years claims free with State Farm in the US then the insurer will consider a letter from State Farm when assessing your insurance.  You need to be able to prove a claims free record with your US insurer.

It was a beautiful day and we went to a village jumble sale in East Sussex.  Little did we expect what we were to find there.  Although jumble sales seem to have been disappearing from the British culture in recent times, we have been blessed with at least one, if not two, each weekend since the new year started.  So, as usual, we were intent on what would be waiting for us at the jumble.

So, we were unprepared for what awaited us outside the jumble.  Firle is a very small village, as the map indicated, but we have been fooled by what looks small on the map and what we might find in real life.  Yet, when we drove in, there was no doubt that this was an excessively small village.  In fact, there was not even a through street in the entire village.  We drove in and found a sign for a free village parking lot.  A sign further on thanked us for not parking in the village.  We found out, as we got out of the car and walked around, that there were some who did park in the village, but we assumed these must be the villagers who lived there.  Who else would have been crazy enough to want to try and drive through to the end of the dead-end street?

Firle was not only small, it was compact.  All the houses and shops were close together.  Furthermore, it does not look like it has had any recent developments in at least the last 100 years.  We had to go into the local shop/post office to get a stamp.  It was the quaintest shop I have yet seen, with groceries in the main room and a small post office area in another room.  I saw through a couple of doors that the owner must live in the rest of the building, as one looked to be a parlor and another, a dining room.  As we came out of the parking lot, we saw a very old looking inn, and on our way to the post office, someone set out a basket of bread for sale in their front yard.  There were several farms adjacent to each other and a manor home somewhere in the vicinity, but we could not see it.  These farms must supply fresh produce and meat, for we could not see a butcher or greengrocers in the area.  Otherwise, it seemed self-sufficient.  The place was so quiet, especially considering it was right off of the highway (A27). 

Add to this, a nice medieval church (St. Peter’s) at the end of the street, unspoiled by modern technology or buildings surrounding it.  It was a perfect picture-postcard view from the street, looking up the path to the church.  Unfortunately, we did not have a camera with us today.  Inside the church, you could see how old the building was, with the plaster flaking in some areas.  We did not buy the guide but looked around briefly.  We plan to come back with a camera.

Firle was quite a find for us today.  It felt like we had stepped back in time, to a simpler way of life.  It is located east, and slightly south, of Lewes.  Now that the days are getting nicer, we will have to take our camera with us everyday, in case we run across another village like this.  There will be more opportunity for exploring on short days out, and we hope to report on them.

It has taken some time for me to adjust my view of the role of the post office.  In the US, it was a place to send and receive mail, buy stamps, apply for a passport, and buy postal orders and postal goods.  Also in the US, mail carriers delivered and picked up mail directly from your home.  In the UK, mail carriers only deliver mail.  If you want to mail something, you either have to stamp it and drop it into the post box, or you take it into the post office.  Since I am still getting used to the different postage rates, it is always best for me to go directly into the post office.  They have so many rules about the thickness, size and weight of the mail, that unless I have the right equipment, I would not be able to determine the postage on my own.  Of course, the US recently made changes in this area, so things are getting bad in that regard as well.  But, since the US uses a larger margin of weight for its mail, it’s easier to determine the amount of postage required.

Although the UK mail offers practically everything the US ones do, there are other differences.  First of all, the UK mail system is so complex and part of it is deregulated.  Don’t ask what that means, because I’m not sure anyone has a clear understanding of it.  Although postal workers are still civil servants, post offices are individually owned, but they are government licensed.  Therefore, the rates they charge are determined by Royal Mail.

One of the major differences is the role of the post office in daily life.  Not only do they provide postal services, they also function as a bank.  You can set up savings accounts and pay bills (council tax, TV licensing, etc.).  Also important is paying your vehicle tax.  You can either pay car tax at the post office or at the DVLA; however, the post office is much more convenient.  Also, the post office can draw your state pension and hand out your cash or deposit it into your bank account.  They have expanded their services to include offering insurance for everything.  And, last but not least, they have gotten into telecommunications.  They offer plans for phone, broadband, cell phones, and TV.  They  have certainly expanded in recent years.

So, whereas, in the US the postal service is simply a post office, the UK post office is so much more.

How many times have we sat in front of the TV, in the US, watching a 30-minute program, which was interrupted a dozen times for commercials advertising such things as Prevacid, Nexium, Procrit, Viagra, and numerous other prescription and controlled drugs? A million, I’d say.

I have been struck by the fact that I have not run across any ads in the UK promoting medications. In fact, I was sitting there one day in my mother-in-law’s kitchen, when a commercial popped up for underpants. You know, the kind that older people wear to protect them from embarrassment when they accidentally leak. These panty protectors are found in US stores, usually in the baby diaper area, or near the pharmacy. However, they are hardly, if ever, promoted. No, more likely you’d see an ad for Detrol LA (Gotta go, gotta go).

What you see in the US is a culture devoted to taking pills to solve all kinds of problems. Instead of wearing a pad, they would rather take drugs, which can have effects on many other things. It seems that in the UK, they would rather accept minor inconveniences than to pop a pill. I don’t know if it’s the different attitude towards medication in general, or if there is a tighter control on the dispensing of drugs. I do know there is a law against advertising drugs on British TV. Whatever the case, I’m glad I’m not being bombarded with ads for medications.