Tax rebate when leaving the UK
If you’re leaving the UK to permanently move abroad; or leaving the UK to work abroad full-time for at least one full tax year, you could be owed a substantial tax rebate from HMRC.
A UK tax year runs from 6 April in one year to 5 April the next. If you are physically present in the UK for 183 or more days in any one tax year, you are considered a UK resident for tax purposes. If you leave the UK to work abroad, you may be treated as a non-UK resident from the date you leave. You can still be a UK resident for tax purposes if you live abroad and visit the UK for more than 90 days in a tax year.
How to get tax back when leaving UK
Before you leave the UK, you will need to fill in form P85 and send this to HMRC. This form enables you to claim tax relief as well as any tax refund that you are owed. It should also be used to inform HMRC of any UK income that you will continue to receive whilst abroad.
If you are employed or on Jobseekers Allowance, you should also include Parts 2 and 3 of your P45 along with form P85. If you’re self-employed, you should send a self-assessment tax return.
UK Income When Living Abroad
If you are leaving the UK, you will usually still be liable to pay tax on your UK income such as wages, pensions, rental incomes, and savings. If you’re eligible for a Personal Allowance*, you will only pay tax on the income above that amount.
*When living abroad, you’ll get a Personal Allowance of tax-free UK income each year if you’re a citizen of a European Economic Area country or if you’ve worked for the UK government at any time during that tax year.
The country in which you are resident in may also tax you on your UK income. If the country in which you are resident in has a double-taxation agreement with the UK, you may not have to pay twice.
Depending on the agreement, you can claim tax relief in the UK to avoid being taxed twice or you can apply to receive a refund after you have been taxed.
If the tax rates in each country differ, you are liable to pay the higher rate. Similarly, if you work abroad during a temporary trip, you may still be liable to pay UK income tax on your earnings.
Each individual situation has different taxation consequences. It is recommended to seek professional advice as certain circumstances are much more complex than others.
Need help claiming your tax back?
Everyone’s tax situation is different. If you would like a professional advisor to help you claim your UK tax back for a low fee, please contact us or call 01473 760359.