December, 2013

Leaving the UK in 2014? Don’t forget to claim your tax rebate

Are you are planning on leaving the UK in 2014? Perhaps you are taking up employment in another country? Maybe you’re emigrating with your family? Or, your job in the UK may have ended and you’re moving elsewhere?

If you’re planning on leaving the UK in 2014 then you may be due a tax rebate. While many thousands of people every year leave the UK without checking whether they are entitled to a tax rebate many other claim back hundreds or even thousands of pounds in overpaid tax.

Our guide looks at when you become non-UK resident for income tax and how you go about claiming a tax refund when you live the UK.

Why you might be due a tax rebate

If you are leaving the UK in 2014 the chances are that it will be part way through a tax year. If your employment ends during a tax year then you can quite often be due a tax rebate.

This is because your personal allowance – the amount you can earn before you start to pay income tax – is generally split into equal monthly instalments. So, when you leave the UK you would be due back any unused part of your personal allowance in that tax year.

When are you non-resident for UK Income Tax?

You will be treated as non-resident from the day after you leave the UK if you can show that:

  • you left the UK to go abroad permanently or your absence and full-time work abroad lasts at least the whole tax year
  • your visits to the UK are less than 183 days in a tax year and average less than 91 days a tax year over a maximum of four consecutive years

What to do when you are leaving the UK

You must tell HMRC if you’re leaving the UK to live or work abroad or if you’re returning home or moving to another country after a period of living and working in the UK.

Normally, one of two things will happen:

  • You will be asked to complete a tax return
  • You will have to complete form P85 ‘Leaving the UK – getting your tax right’

HMRC will use the information on either your tax return or the P85 form to send you any tax refund you’re owed and work out if you’ll become non-resident. It’s important that you enclose the original parts 2 and 3 of form P45 if you have one as HMRC will not be able to make any tax refund you are owed without them.

If you’re leaving the UK to work full-time abroad for a UK based employer for at least a complete tax year, you’ll need to fill in a tax return as well as a form P85.

Do you still have questions? If so check out the explainer video that we created below, if that does not answer your question, feel free to leave a question in the comments below and we will answer it personally: