Leaving the UK to work abroad comes with its own set of questions regarding paying tax, both in your new country of residence and back home. Our expert team is here to advise you on the best exit strategy for the UK tax system that will keep you and your business compliant and safe from prosecution or fines.
How to leave the UK tax system
You must tell HM Revenue and Customs (HMRC) if you are planning to live abroad permanently, or you are going to be working abroad full-time for more than one full tax year.
How you inform HMRC depends on your employment status and whether you do your own tax returns.
If you usually complete a Self-Assessment tax return you can inform HMRC that you are leaving the UK in the ‘resident section’ (form SA109).
If you do not usually fill in a Self-Assessment tax return, you’ll have to complete a P85 form and include sections from your P45 to let HMRC know that your residency and work status has changed.
You might also need to let your local council know that you no longer live in the UK, to avoid any confusion around paying council tax.
Often it is quicker and easier to ask your accountant to inform HMRC for you.
Getting these things right first time is really important, so speak to one of our accountants if you need more information.
National Insurance
You may wish to continue paying NI if you intend to move back to the UK one day. Paying NI ensures that you will be eligible for benefits and your state pension in future.
There are several ways to go about paying your NI contributions that are best discussed with a trained accountant. However, we have covered voluntary NI contributions in another blog, which you can find here.
Tax refunds
If you were taxed under the Pay as You Earn (PAYE) scheme and you left the UK before the end of the tax year, it is possible that you were below the non-taxable personal allowance threshold (£12,570). If this is the case, you will be entitled to a refund.
Your personal allowance is paid into your account throughout the year, so you receive a portion each time you are paid, rather than a singular amount.
HMRC should pay this back automatically, but they will not pay into an overseas bank account, so make sure you retain your British one until you receive the payment.
Get help from a tax advisor
The simplest way to leave the UK tax system is to employ the services of a chartered tax advisor from SMCO.
Our experts can guide you through the process and ensure that you do not have to pay more than is necessary. Get in touch with one of our experts or read more about the services we offer here.
