Taxd

Steps to Claim Back Tax When Moving Abroad from the UK

If you have been taxed under the pay as you earn (PAYE) system in the tax year in which you leave the UK, then it is likely that you will be due a tax refund upon your departure from the UK.

Arjun Kumar
Arjun Kumar
Founder
Oct 15, 2024

This is because if you only work for part of the tax year or leave the UK part way through a tax year, you may not have received your entire tax-free allowance and may have paid too much tax.

Claiming tax back when you live abroad can be a difficult task for many. This article will guide you through the process of starting a claim and what to expect when doing so.

What can you get a tax refund on

You can get a refund on any taxable income you’ve paid taxes on, including:

  • Pay from your current or previous job
  • Pension payments
  • Income from a life or pension annuity
  • A redundancy payment
  • A self-assessment tax return
  • Interest from savings or PPI
  • Foreign income
  • UK income if you live abroad
  • Job expenses, like working from home costs or clothing and tools for your job

How do I claim UK tax back from overseas

Have you overpaid tax and want to claim it back from abroad? If you leave the UK to either work or live abroad, you can be entitled to a tax refund. As always, the outcome of your tax refund claims depends on your individual circumstances and current tax status.

Here, we will discuss how you can claim your tax rebate after leaving the country, including the amount and how you will receive your refund claim.

Before you start your claim

Here are a few things you must know before claiming your tax back from abroad.

  • If you are already completing a self-assessment tax return, you do not need to make a separate claim.

  • As a UK non-resident, you can claim back personal allowances and tax from abroad on any UK income received in the last four tax years or the current tax year.

  • Ensure you have the necessary documents and information before starting the claim process.

  • Depending on your income sources, you may need to complete a self-assessment or use other specific claim forms. This includes income from profession, trades, and rental property.

  • Self-assessment forms that include the SA109 (residence pages) cannot be submitted directly from the HMRC website, so you have to submit them online using HMRC-approved tax software, like Taxd.

  • Determine if your country has a double taxation agreement with the UK for potential relief.

How to claim a tax refund from abroad

HMRC will repay your overpaid taxes once you claim a refund, whether you complete your tax return or not. However, the process will be different in both cases.

If you do not complete a tax return

  • You need to fill out the P85 form detailing your departure details and submit it along with the P45 form.

  • If you are claiming a tax refund for employment expenses, you may also need to submit a P87 form.

  • You have to submit these forms to the HMRC portal. HMRC may contact you if they have any queries regarding your P87 form.

If you do complete a tax return

  • If you complete a self-assessment tax return, you do not have to separately submit any form for repayment.

  • No additional forms are required once you complete your tax return.

  • HMRC will initiate your refund once your tax returns are processed. However, you have to wait until the end of the tax year to claim the tax return (5th April).

When to submit the P85 form

A form P85 is usually appropriate where all of the following apply:

  • You leave the UK and become non-resident in the UK, being eligible for split-year treatment on your departure.

  • You have had tax deducted at the source from your pre-departure earnings in the tax year.

  • You do not expect to have any UK-sourced income while living overseas.

You should not normally complete a form P85 if HMRC has already asked you to file a tax return for your departure year (or if you have already completed one). An exception is when you are working overseas for a UK-based employer, and you will not be liable for UK tax on your earnings. In this case, a form P85 may be necessary for HMRC to issue an NT (‘no tax’) tax code.

How to submit P85 form

The form is usually completed and submitted online, but it is also possible to print the completed online form and submit it by post. If you have not yet left the UK, you should print and post the form. To make a submission, see GOV.UK.

Form P85 asks for information like:

  • your most recent address in the UK
  • your contact address outside of the UK
  • the date you left the UK
  • the number of years you have lived in the UK
  • the number of days you expect to spend in the UK in each of the next three tax years
  • details of your overseas employment, if applicable
  • details of any employment duties you expect to carry out in the UK while overseas
  • if you have a UK employer while overseas, details of that employer
  • details of sources of UK income while you are living abroad

Deadline

Form P85 is not a legal requirement, and therefore, there is no deadline. However, you may need to notify HMRC that you owe tax for that year by 5 October following the end of the tax year if HMRC has not issued the tax return.

If you do not submit a form P85 or a tax return

If you do not complete a form P85 or a self-assessment tax return for your year of departure, then they should issue a P800 tax calculation to the address they have on record for you.

Unlike refunds arising from the submission of form P85, refunds on form P800 can be paid by bank transfer.

If you receive a refund and then file a tax return

If you receive a refund after submitting form P85 or receiving form P800 for the year, you later complete a self-assessment tax return for the year.

How to file UK tax return using Taxd

1. Start the Process: Visit the Taxd website and create an account or log in.

claim tax refund UK.png

2. Personalise Your Return: Answer initial questions to tailor your tax return (e.g., job status, residency, additional income).

claim back tax.png

3. Create an Account: Sign up using Google or your email and password.

claim back tax when moving abroad.png

4. Complete Residency Section: Use the Statutory Residence Test to declare UK tax residency status and claim split-year treatment if applicable.

moving abroad from UK.png

5. Enter Employment and Income Details: Provide employment status, P45 figures, and rental income details, including expenses.

tax back when returning UK.png

6. Final Review: Review the tax calculation and submit the return digitally to HMRC after verifying your identity.

7. Download Records: Save the tax return and calculation (SA 302) for future reference. Use the chat feature or book a call with an advisor for assistance.

Note: These steps provide a brief overview and are not comprehensive. The entire process is broken down into multiple sections.

For detailed step-by-step instructions, you can check out this video:

Left the UK? Filing a Split Year Outbound Tax Return

With Taxd, you can file a self-assessment tax return in as little as 30 minutes.

Conclusion

If you leave the UK partway through the tax year, you might be eligible for a tax refund because you may not have used your full tax-free allowance. You can claim tax back on things like job income, pension payments, and UK income while living overseas. The refund process differs depending on whether you submit a tax return or use specific forms like the P85.

As a HMRC-recognised software, Taxd can handle all your tax return obligations in a simplified and efficient manner.

FAQs

1. Am I eligible for a tax refund when exiting the UK?

That depends. Your eligibility for a tax refund upon leaving the UK hinges on whether you’ve overpaid taxes during the fiscal year.

2. What constitutes a tax refund for departing individuals in the UK?

In the UK, taxes are typically deducted from your income throughout the year under the pay-as-you-earn (PAYE) system.

3. How does the UK tax system influence refund eligibility?

The UK’s progressive tax system, where tax rates correlate with income levels, is crucial in determining tax refund eligibility. For residents, worldwide income is taxable, while non-residents are taxed only on their UK income.

4. Are National Insurance Contributions Refundable?

National Insurance Contributions (NICs) are typically not refundable. However, there are exceptions, particularly for individuals who have overpaid or are leaving the UK.

  • Overpayment: If you’ve paid more NICs than required in a tax year, you may be eligible for a refund.

  • Leaving the UK: If you’re leaving the UK to reside in a non-EU country, you might be able to claim a refund of your NICs, depending on the total contributions and your circumstances.

Like the article? Share it with your friends!

Blog

Latest news

Check out our latest product and company updates, interviews, useful resources and more.
Start your tax return