Ben’s Portugal Blog Update

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It’s been quite a weekend for us here in Portugal.

It started on Friday with a visit to our accountant. This is an annual meeting, which reveals the provisional figure for our tax bill.

Suffice to say the news wasn’t good. We have a gargantuan bill to pay in the summer and sadly, due to the fall of sterling, something of a shortfall to make up between times.

Portugal Blog - Saving up for the tax bill
Portugal Blog – Saving up for the tax bill

If you’d have told me late last year that it would have made better sense to keep our tax savings in the safety and security of a Portuguese bank, I probably would have laughed. We left it in a UK bank. However, a run of bad news out of the UK this year has hammered the pound. On a Portuguese tax return, your UK-based earnings are converted at the exchange rate on the last day of the tax year. For 2012, that was about 1.23. We ended up moving the money at 1.15. Well, it doesn’t take a mathematical genius to work out that that’s a pretty crappy turn of events does it?

Now, the events in Cyprus have seen the Euro struggle a bit, so we may make back some of our losses in the coming months. But this does go to prove that living in one country and continuing to earn money from one with a different currency can put you in some precarious situations. You win some, you lose some.

“Still, at least we have the sunshine,” my wife said. This proved rather ironic when at 9am on Sunday morning we were woken up by an apocalyptic hail storm, featuring stones the size of marbles.

This weekend, we’ve also spent a lot of time on the phone with various friends and family members planning their holidays in Portugal. Strangely, we don’t get an awful lot of visitors in the winter(!) but we have a flurry due in the next month or two. Hopefully, summer will make an appearance soon for us as well as them, as right now you can’t predict what’s going to happen from one day to the next.

Portugal Blog - More days like this soon please
Portugal Blog – More days like this soon please

So, for now, it’s time to get our heads down and make up the tax bill money as quickly as possible, which means switching to frugal mode. The irony here is that we actually rather enjoy the lean times – being economical yet inventive in the kitchen, and being forced to enjoy free (and healthy) outdoor activities. We just need it to warm up a bit. The beach costs nothing – but it’s not much fun in a hailstorm.

PS. We’ve had some great (and enlightening) responses to our Portugal Blog Survey, posted last week. Soon we will publish some details of the responses, and start to tailor some posts based on requests readers have made.

Euros image credit: Wikimedia Commons

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5 Comments - Write a Comment

  1. I know what you mean about enjoying the lean times, although not sure for how long!!!! I gave up work just before Xmas (office politics, can’t be doing with it!!) and we’ve rather enjoyed cooking from scratch and looking for food bargains etc. We live in the countryside and there are lots of walks with the dog and places to go for cake and tea without using too much petrol!! I’ve even felt smug not putting the CH on and just using the reverse aircon at 16 degs – togged up in fleeces and several pairs of socks and trousers !! We do however feel that this frugality would be much more if we had the warm weather to look forward to!!! At least being ‘tight’ with the heating and other things means we can still get a week in Tavira in June !!! I hope that the exchange rate rallies for you soon, (and for us!!) in September we were enjoying an exchange rate of about 1.25 in the ATM at conceicao and I’d planned to use that method of paying the rental on our apartment. Hope things improve for you both as the year goes on – keep the blogs coming, they are very enjoyable, as was your book!!

  2. Hi Ben and Lou – hope the weather perks up for you, and for us – we come out for ten days at the weekend 🙂 . I have been following it quite closely day by day and it does seem to be very changeable. Mind you, yesterday afternoon in London at 2pm it went so dark it was like midnight. Well weird and a little spooky. Hope the tax return and subsequent economy drive goes smoothly. Saz

  3. Hi Saz – we certainly hope the weather perks up soon too! At the moment we are getting at least some sun, but you have to get out and enjoy it as soon as it appears, before the rain comes again. Hope you have a fab time here 🙂

  4. Hi Marion,
    I think that all across Portugal people are putting on extra socks and jumpers to cut down on the heating bills – I know we are. And we’re definitely focusing on leisure activities that minimise expenditure. Fingers crossed the exchange rate will rally and the sun will come out soon!
    I’m glad you enjoyed the book – and we will certainly keep the blog posts coming 🙂
    Best wishes, Lou

  5. Dear Ben and Lou, I know exactly how you feel. Not only are we paying commercial/business taxes, it’s also the time for the first installment on property taxes. I must say though, I find the annual property taxes to be pretty fair which makes moving to Portugal still very attractive for many new buyers.
    As for the weather, well it’s still raining at the moment with sunshine forecast after the coming weekend .)

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