Are you saving for a sunny retirement abroad?

Maybe you’re embarking on a full-scale emigration with all the family?

Perhaps you’ve been a welcome working visitor from overseas but have come to the end of your stay?

Very different circumstances with one important thing in common – UK tax. Not exciting, not easy to understand, but a crucial part of everyone’s financial planning if you have left or are leaving the UK.

You have obviously been fulfilling the legal requirements to pay appropriate tax whilst you have been working here, so make sure that you get any tax refunds you are due before you leave.

Why would I be due any tax back?

Whether you are a taxpaying foreign national or UK citizen, there are three main reasons why you could be due a tax refund from the UK tax office.

  • You maintain ownership of UK property after you leave and rent it out whilst you are living abroad.
  • You have not claimed for any work-related expenses within your entitlement.
  • You have not used all of your tax-free personal allowances in the year you leave the UK.

Ownership of UK property

If you keep your property but live abroad then you join the category of ‘non-resident landlord’.

Many people keep their properties for the rental income or simply because they haven’t yet decided if the move abroad is permanent. If you let your property then any rental income must be declared to HMRC, even if you are not making a profit.

The tax refund element of property ownership comes in the form of receiving a tax rebate on some or all of any tax paid on your rental. Most taxpayers end up paying for something to do with their work. The Tax Office allows people to reclaim a percentage of the tax they have paid on these items.

Even if you have never done this before, while you are sorting out everything else for the big move you may as well take it into consideration – it is your right after all.

Select the size of your move to get free quotes

Do you, or have you ever, spent money on any of these things?

  • Trade Union fees or subscriptions to professional bodies
  • Buying tools or safety equipment
  • Working from home
  • Work travel between locations in your own car or van
  • Buying and/or laundering your work uniform or protective clothing

Then it’s worth considering them within your claim. They may seem like paltry amounts at first but to paraphrase an old adage, ‘take care of the tenners and the thousands will take care of themselves’.

If you’ve just left the UK (or you’re about to), you’ll probably need to convert some of your savings into your new country’s currency. 

However, it’s best to avoid using high street banks for this process, as you’ll usually have to pay high fees, and you won’t get the best exchange rate. 

That’s why we’ve teamed up with Wise, an easy-to-use online international money transfer service which uses the real exchange rate, and charges low fees.

How much could you save? Well, its service can be up to 8x cheaper than high street banks.

Join more than 7 million people and start using Wise today.

Personal allowance

As you probably know, the Tax Free Personal Allowance is the amount taxpayers are allowed to earn before they start paying income tax.

The amount usually changes each year. If you leave before you have used up your entire personal allowance amount, then you may be due a tax rebate.

How much could I get?

The amount you could be entitled to is worked out on a case-by-case basis because it depends on a combination of; your earnings, how much tax you have paid and which month you leave Britain.

It is worth knowing that any claim can be backdated by four years and that you do not have to be living in Britain to make the claim.

What do I need to show HMRC?

If you are leaving the UK permanently and you are not sure if you are returning or if you know you are going to be working abroad for at least one full tax year, then you need to submit a P85 to HMRC.

This should be accompanied by either a P45 or P60 certificate for the tax year in which you are leaving.

Different tax relief regulations have their own evidence requirements. For example; keeping a travel log of business travel or saving hotel receipts to prove accommodation and subsistence expenditure.

How long does a claim take?

Usually between 6-12 weeks but this can vary depending on HMRC timescales and if further information needs to be provided.

If you have already left don’t worry you can still claim as long as you have left the UK within the last four tax years.

So, get ‘sort out tax stuff’ onto your ‘before we leave’ list! Don’t miss out on your legitimate tax relief entitlement.

This article was written by Tony Shanks Operation Director at Leaving the UK? Claim your tax back today with expert help.