German resident and UK income

[pamparana]

I am a German resident and citizen and I have a full-time job here which pays taxes as usual and everything is on board.

Now additionally, I have been a bit naughty and have been doing some side jobs for a company based in the UK (and been using my old UK bank account) and generating around £6K/month on the side. So far I have not declared it and left the money alone in the bank.

However, I realize that this is not sustainable and basically I have these choices:

1: Going forward declare this as additional income and hope they do not look too deeply in the last year
2: Try and find some effective setup that minimizes the tax burden.
3: Continue as is.

I would have left Germany for more tax-friendly lands for this but I have a kid here and unfortunately am tied to this country for the next 10 years at least.

What do you guys think could be a good option for me?

 

[MiltonStone]

1: Going forward declare this as additional income and hope they do not look too deeply in the last year

that is the very best option for you to avoid troubles, huge troubles in the future. You can't hide in Germany with such money.

Alternatives: get paid in crypto, keep the crypto for at least one year, exchange it tax free. There could be a problem with the source of funds for the cryptos at first.

 

[pamparana]

that is the very best option for you to avoid troubles, huge troubles in the future. You can't hide in Germany with such money.

Alternatives: get paid in crypto, keep the crypto for at least one year, exchange it tax free. There could be a problem with the source of funds for the cryptos at first.

Yeah, I am thinking this as well.

Especially with a kid depending on me as well, it is probably not worth it for me to do this.

So far I have been using the UK account and a UK address but this is hardly sustainable going forward.

 

[pamparana]

BTW This money also never touched German accounts. What are the chances of getting caught? Can I continue this for a few years (assuming the money is never used in Germany).

 

[JackAlabama]

BTW This money also never touched German accounts. What are the chances of getting caught? Can I continue this for a few years (assuming the money is never used in Germany).

Well Germany is one of the worst tax enforcers worldwide (not many top it) and your side salary of 6k/month is also relatively high for German standards (not that many net this).

Hard to say really if you can keep quiet, do not talk about this to your neighbour and the bank has 0 suspicions (phone number, wire, usage pattern) you might get away for the time being but things (regarding reporting or whatever) can (and most probably will) change.
So maybe best would be to come clean eventually.

 

[Mike Forman]

What address is on record in the UK bank as your permanent address? If its in UK then they highprobably don't exchange information by CRS to Germany but the UK tax authorities will get this information. I assume you also didnt declare the income in UK?

It would be better to bill by setting up a Ltd corporation (don't use your own name as shareholder and director as the record is public) and keep the money in there and pay the the low corporate tax in UK. Finally it also depend what your plan is with this money? Any bank or broker you will move it to, it will be reported, unless you could obtain another residence and open an account in that jurisdiction.

 

[pamparana]

What address is on record in the UK bank as your permanent address? If its in UK then they highprobably don't exchange information by CRS to Germany but the UK tax authorities will get this information. I assume you also didnt declare the income in UK?

It would be better to bill by setting up a Ltd corporation (don't use your own name as shareholder and director as the record is public) and keep the money in there and pay the the low corporate tax in UK. Finally it also depend what your plan is with this money? Any bank or broker you will move it to, it will be reported, unless you could obtain another residence and open an account in that jurisdiction.

So, the phone number and address is UK based and you are right that UK tax authority gets this information.
I think I have now prioritized peace of mind. I would eventually like to use this money to buy a flat in Germany. So might as well bite the bullet and pay their ridiculous taxes.