On leaving the UK, you will be required to complete and submit to the Inland Revenue a form P85. The form is essentially a departure questionnaire, which will enable the Inland Revenue to consider your tax residence position. It is advisable to have this form checked by a professional adviser before submission, as an incorrectly completed form could impact your tax position.
If the Inland Revenue are satisfied from the form that you will break UK residence, your employer will receive an ‘NT’ or ‘No Tax’ code to ensure that no tax is withheld from your employment income. Your employer will also no longer be required to report any benefits on form P11D.
If the Inland Revenue issue a return, it must be completed and submitted (even if you have no taxable income). You do not need to report non-taxable assignment income or gains.
If you do not receive a tax return but have taxable income or gains, you should tell your tax office by 5 October following the tax year end.
If you want the Inland Revenue to calculate your tax, you should submit your tax return by 31 September following the tax year end. In other cases, the return and self assessment must be filed by 31 January following the tax year end (unless your return is issued late in which case you have three months to complete it). If your return is filed late, there are automatic fixed penalties. In either case, the full amount of any tax due must be paid by 31 January following the tax year end. In addition, if you have significant income not taxed at source, (eg UK rental income) you may need to make payments on account. If this is the case, the first installment due will also be 31 January with the second payment due by the following 31 July [if you would like to be reminded of these dates via email, please join our free mailing list].
We strongly recommend that you file a tax return for the year of your departure and the year of your return to the UK, as it is likely that you will have paid too much tax in these years. This is because you will not have received the benefit of your full personal allowance and lower rate bands against your income.
If you are renting out your UK property while you are overseas, it is recommended that you complete form NRL1 which will allow you to receive rental income without deduction of tax by your agent or tenant. Instead, you can choose to settle any liability on your tax return.
If your property is jointly owned (eg husband and wife), each part owner will need to complete and submit a separate form.
Return to the UK
You should always review your tax position before returning to the UK particularly if your residence status is about to change.
You will need to submit a completed form P86 to the Inland Revenue on arrival to re-establish your residence position.