If you are leaving the UK to live or work abroad, it’s possible that you may be entitled to a tax refund. As ever, the outcome depends on your personal circumstances and tax status, and it’s important to let HMRC, the UK tax authority, know about exactly when you move overseas so that the right calculations can be made.
Who Is In A Position To Claim Tax Back?
Those who may be able to make a tax claim include UK residents who are moving abroad. In this situation it’s likely that you will become non UK resident for tax reasons, and pay tax in the country in which you are living rather than the UK. Claims can also be made by those who have been living or working in the UK (and who have consequently been in the UK tax net) and who are now moving to another country, or perhaps returning to their home country.
Why Might You Be Due A Tax Refund?
In the UK, every individual is generally entitled to a set of tax-free personal allowances each year. If you haven’t used these allowances entirely you may be entitled to a refund. Another two situations which may also prompt a tax refund:
- If you are an employee with tax ‘withheld at source’ and become non UK resident part way through a tax year
- If you are self-employed and have made ‘payments on account’ towards your expected annual tax liability and your changed tax status means those pre-payments will be more than your actual tax bill for the year
How Do I Claim My Tax Back?
Claiming tax back will mean you’ll need to complete some specific forms from HMRC. It can be useful to work with a tax expert, especially if your tax affairs are complicated. There are also time limits to be aware of, and any claims must generally be made some time in the four years from the end of the tax year where you think you’ve overpaid.
Overpaid Income Tax
Situations in which you may have overpaid Income Tax generally occur when you don’t use all of your personal allowance or you’ve pre-paid tax and experience a change of circumstances or resident status.
Overpaid Capital Gains Tax
You may find yourself having overpaid Capital Gains Tax if you sell a UK property during the tax year and pay the tax due within 60 days based on your estimated taxable income for the year. If the actual taxable income turns out to be less, the overpaid Capital Gains Tax can be reclaimed on your Tax Return.
Claiming Tax Relief On Employment Expenses
You may be able to claim tax relief on your employment expenses too. This is because there are reliefs which can reduce the tax bill on your employment income, including any business expenses which are ‘wholly, exclusively and necessarily incurred in the performance of the duties of your employment’. For this type of claim it’s vital to keep accurate records and evidence. Do be aware that if your employer reimburses you for employment expenses then a claim won’t be able to be made. To manage these claims you’ll need to make use of a specific form, called P87, or handle things through the submission of your annual self-assessment Tax Return.
Support to claim tax back from The Fry Group
Over the years we’ve helped thousands of British expats to exit and re-enter UK tax system. Many of our team have also had the experience of living or working overseas. With offices around the world, our expert advisers can provide up-to-date and intelligent information to help you make sense of the UK tax system.
To discuss your personal tax situation with one of our team please contact your nearest office.
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