If you are thinking about leaving the UK to live abroad, it is important to be aware of the tax laws in the UK, as well as those in the country you’re relocating to. If you fail to keep track of the taxes that you ought to pay and don’t know your rights, you could end up paying more than you should.
Currently, you are a taxpayer in the UK. When you move abroad – whether permanently or for a long period of time, you might be taxed in both countries. So, to avoid this, it’s important to fill in the right forms to notify HMRC that you’re leaving the UK.
In this guide, we’ll outline everything you need to know about telling HMRC you’re moving abroad and how to complete a tax return when leaving the UK. Continue reading to make sure you don’t end up paying more than you should.
Yes, it is essential that you remember to tell HMRC that you’re moving abroad to ensure that you pay the right amount of tax.
You must tell HMRC if you are either:
You don’t need to notify HMRC that you’re leaving the UK for holidays or business trips.
We know it’s important that you tell HMRC when you’re moving abroad for tax purposes, but how do you do it?
Well, it’s quite simple really. All you need to do is fill in the P85 form and send it to HMRC. You can get a P85 form for leaving the UK from your employer or Jobcentre Plus if you’ve been claiming Jobseeker’s Allowance. Alternatively, if you’re self-employed, you should send a Self-Assessment tax return instead.
If you leave the UK to live or work abroad, you may be entitled to claim back some of the income tax that you have paid.
To ensure you don’t pay too much tax when you move abroad, you must send form P85 ‘Leaving the UK – getting your tax right’ to HMRC. This form allows you to claim a tax refund when leaving the UK, if you’re owed one.
However, sometimes, if your tax affairs are quite complex, you will need to complete a tax return for your year of departure rather than (or as well as) completing a form P85. For example, this might be the case if you continue to receive UK income after leaving the UK, or if you are self-employed.
If you’re unsure whether you need to complete a tax return when leaving the UK to live abroad, the best thing to do is call HMRC and advise them of your circumstances – they can then confirm what, if anything – they need from you.
Completing a tax return when leaving the UK is pretty straightforward. Unfortunately, however, you can’t use HMRC’s online services to tell them you’re moving abroad. Instead, you need to:
If you are entitled to a tax refund after leaving the UK, HMRC will send it to you by post or by bank transfer.
Once you have notified HMRC that you’re leaving the UK, they will work out whether you are owed a refund for the tax year you’re moving or not.
If you are still receiving UK income after moving abroad, you may still need to pay UK tax even if you’re not a resident anymore. For example, this might be the case if you receive income from renting a property in the UK.
You may want to continue paying National Insurance after moving abroad if you’re either:
You cannot claim back any National Insurance after you leave the UK. However, anything you have paid might count towards benefits in the country you’re moving to if it has a social security agreement with the UK.
Moving abroad should be an exciting time – you shouldn’t have to face being out of pocket because you haven’t notified HMRC that you’re leaving the UK.
It’s so easy to complete a tax return when moving abroad that there really isn’t any excuse for not doing it.
Take a look at some of our other moving abroad guides: