When you decide to move out from the UK, the most important thing to consider is taxes . A lot of individuals do not understand that they can reclaim the tax upon exit from the United Kingdom.  In this article, we shall assist you in how you can be able to claim tax back when leaving UK in a step by step manner.

What Does It Mean to Claim Tax Back?

It’s possible that you have been paying income tax via the Pay As You Earn (PAYE) system if you work in the United Kingdom. An individual should have a valid reason for possibly leaving the UK before the conclusion of the tax year.

This is because the UK operates a year-round tax system, and you may not have earned as much as the tax system is assuming that you have. Also, when one exits the United Kingdom, he or she is allowed to reclaim taxes that he or she has paid in excess.

What Does It Mean to Claim Tax Back?

The present situation of tax refund in the UK state of affairs states that every individual is entitled to demand a refund amount which they have paid extra in taxes than needed. This commonly happens when:

Why Can You Claim Tax Back?

You earned less than £10,000 (the personal allowance or the income level under which one does not pay tax).

You have received your wages for employment only for part of the year.

In any of these circumstances, you are able to apply for reclaiming the tax back on exit from the United Kingdom.

How Can I Claim Tax Back When Leaving UK?

To get your tax back when you no longer live in the UK, the procedure is quite simple. The following are the detailed steps you can use in case you get stuck in the process. Maybe some information is required that you need to deliver;

1. Complete Form P85

First step is filling out Form P85. When you leave the UK, this form will inform the HMRC that you are eligible for tax refund or note.  When filling out the P85 form, you will need to provide the following details:

2. Provide the Necessary information

Your National Insurance number.

Details of your employment, including your last day of work.

Information about your future plans, including whether you will be working abroad.

Your bank details, so HMRC can send your tax refund directly.

Claim Tax Back When Leaving UK

3. Submit Your P45

A P45 form should be issued to you by your employer when you resign. The amount of tax you paid for the current tax year is shown on this form. When submitting the P85 to HMRC, it is essential that this form be attached. You should talk to your company and request your P45 if you do not already have it.

4. Send the Forms to HMRC

After the completion of the P85 then submit your P45. Make sure that you submit them to their Majesty’s Revenue and Customs (HMRC). You can mail it to the HMRC, or you can fill the P85 form online on the HMRC website.  It is important to note that you should keep the copies of forms as your record as claim tax back when leaving UK.

5. Wait for Your Refund

Once forms have been submitted, the HMRC will then assess the validity of your tax reclaims. This process may take a couple of weeks and the reimbursed tax will be remitted by way of direct credit to your bank account or by the issuance of a hand cheque. In case they need more information, they may association with you for more details.

Can You Claim Tax Back If You Return to the UK?

Yes, if you decide to return to the UK later, this is one of the few instances where you may ask for tax back while leaving the country. However, it is important to understand that you are only eligible for a refund in the tax year if you have exited. In case you go back to working and earning a salary, your tax code changes to that of the new year earnings.

What Happens If You’re Self-Employed?

If you are self-employed and planning to move from the UK, the process is different. Instead of filling out the P85 form, you must complete the self-assessment tax return. This form will assist you to identify whether you have overpaid your taxes by showing your income and total expenditures for the current year.

How Long Does It Take to Get Your Tax Back?

The duration to reclaim tax back differs when one is leaving the United Kingdom. In general, HMRC takes 8-12 working weeks to process refunds. However, if the case is different from the standard one, it will take more time to get it done. A wise course of action is to bring it to the attention of HMRC if you have not received this refund for more than 12 weeks.

What If You Don’t Claim Your Tax Back?

The people may be losing a lot of money if they do not reclaim their tax back as they leave the United Kingdom. The UK authorities will not return the money to you if you did not fill the P85 form or a self-assessment return. To reclaim the tax back, one has four years from the end of the tax year in which he left, for instance, if he left in October, it ends after the next October. Thus, if you delay, you may never be able to recover your money back.

Other Considerations When Leaving the UK

To be more specific, the readers should be aware of their financial prospects every time they take their leave from the UK, not merely the taxes they need to pay. Here are a few other things to consider:

  1. Pension Contributions

If you contribute to any pension plans in the UK, you may think about whether you want to keep on contributing into a pension plan set up in the UK, or retire and move your pension to the current country you live in. It is possible to receive a recommendation on such matters from financial consultants depending on how unique your situation is.

  1. Student Loans

If you are studying in another country, if you borrowed a student loan from the government of the United Kingdom, you cannot avoid repaying the loan. They notify the Student Loans Company about their new address and income.

  1. National Insurance

If you are planning to travel back to the United Kingdom in the future or want to maintain the rights to UK state pensions and benefits, Then it may be useful to continue paying National Insurance while you are overseas.

Conclusion

If you decide to move to another country, from the UK, it is important to handle your tax affairs before you go out. If you claim tax back when leaving the UK, you could find it very simple to do if you follow the steps.

It is necessary to fill out the P85 form, submit your P45, and follow all timeframes diligently to avoid deprivation of your refund. No matter if you are moving, relocating or just going for a period of time in which case your tax obligations towards that specific country will come to an end.

For more information on how to claim tax back when leaving UK, please visit the official website or consult with HMRC.

Published On: October 9th, 2024 / Views: 123 /

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