Tax Articles

Claiming Back Tax When Working Abroad

Are you leaving the UK to work abroad?

With the population of the UK increasing to 61 million and unemployment rising rapidly, many people are leaving the UK to work abroad. Our tax experts answer some common tax questions on this topic:  

1. Am I due a tax refund when leaving the country to work abroad?
2. Can I claim all my tax back when leaving the UK?
3. How can I calculate my tax refund?
4. What about tax rebates for previous years?
5. When can I claim my tax refund?
6. What other forms do I need to claim my tax refund when leaving the UK to work abroad?
7. How long does it take to claim my tax back?
8. Can I claim my National Insurance (NI) back when working abroad?

Am I due a tax refund when leaving the country to work abroad? 
As you are leaving the UK part way through the tax year you can claim a refund on the tax and income for the year.

Can I claim all my tax back when leaving the UK? 
If you have earned less than the annual tax free allowance (for 2009/2010 this is £6,475) then you can claim back all the tax you have paid. If your income for the tax year was over, you will be able to apply for a portion back. For example if you earn £10,000 between April 5th (the start of the tax year) and the date you leave the UK and if you have paid £2,000 in income tax, you will be due a tax refund of £1,207. 
 
How can I calculate my tax refund? 
When you finish working, your employer in the UK should provide you with a P45. The P45 will state the amount that you earned and how much you paid in tax for the fiscal year in question. Input these amounts into our tax rebate calculator which will provide an estimate of any refund due.

What about tax rebates for previous years? 
If you have been with the same employer for the whole tax year, it is less likely that you will be due a refund. You can still check however. Each April, if you are working, you will be given a P60 from your employer. The furthest in arrears that you can claim is 6 years. 
 
When can I claim my tax refund? 
As soon as you are given your P45 from your employer you can claim your tax refund. If you are not given a P45 or lose it, you can always ask your former employer to provide a statement of earnings, which will act as a sufficient replacement

What other forms do I need to claim my tax refund when leaving the UK to work abroad? 
You should complete a form P85 from the Inland Revenue. Include this with any tax documents you have, together with a covering letter.

How long does it take to claim my tax back? 
It depends on your tax office but refunds usually take between 4-6 weeks. Often there are backlogs and as a result it can take up to 90 days for refunds to be processed.

Can I claim my National Insurance (NI) back when working abroad? 
Many people are unaware that you can claim back National Insurance Contributions. An NI (National Insurance) Rebate can be claimed at anytime and only needs to be done once. After that it is automatically done for you each year. Press on the link to claim a national insurance rebate.