Leaving UK and P85

Finance, Taxes, Banking, Insurance and Retirement
1
Good morning,

I have just seen this thread [1] which mentions submitting a P85 form [2] to the nice people at Her Majesties Revenue & Customs.

This is probably a mistake to admit in a public forum, but...

I've not heard of this before and continued to receive requests to complete a Self Assessment Tax Form [3]. In these I've just stated earnings on savings that are still in the UK and not mentioned employment earnings in Switzerland. Therefore, I've received a small rebate of the tax taken from the interest on my savings. I have continued with voluntary national insurance contributions [4].

I'm guessing that it then looks to the UK government that I've not left the counrty, which makes me wonder what I should be doing? Should I submit a P85 now? As I've been paying into both systems, has that been wasted money, or at retierment will I be able to claim state pensions from both?

Thanks for sharing your opinions.

[1] Possibly moving to Switzerland - Relocation package?

[2] http://www.hmrc.gov.uk/cnr/p85.pdf

[3] http://www.hmrc.gov.uk/sa/index.htm

[4] http://www.hmrc.gov.uk/cnr/osc.htm

2
Hi,

I'm not sure about the state pensions I'm afraid, but I can tell my situation and maybe that'll help you work out what you need to do.

In the UK, I was in both full time employment (taxed via PAYE) and part time self-employed (taxed via self-assessment). When I spoke to my accountant about how to handle tax etc after I leave the UK, he advised me to file a P85 with HMRC before leaving.

According to him, the P85 declares that you won't be resident (for tax purposes) in the UK 1 full tax year or more, and so are exempt from UK income tax, NI contributions etc. Without it, he said I'd have to pay both Swiss and UK tax on my income, as on paper I'd still be tax-resident in the UK.

I still have to file one last tax return for the last tax year that I was in the UK, even though I left part way though it, but I should only have to declare income in the UK thanks to the P85.

One other thing related to this, when I talked to my bank in the UK and told them I was filing a P85, they said I'd have to close and ISAs or savings accounts I had, so that I'd have no investment income in the UK that would need taxing.

If your still being asked for tax returns by HMRC, I'd suggest talking to an accountant in the UK to get professional advice on how to proceed. If you have to talk to HMRC, I'd suggest being honest, but vague - only go in to detail in areas they ask about. You shouldn't withhold information of course, that'd tax evasion, but I believe you still have a right not to incriminate yourself!

Good luck, hope this helps, if you need the name of an accountant in the UK I can pass along the details for mine.

3
You do NOT have to close savings accounts (ISA's yes). Many banks will allow you to move abroad (big of them, isn't it), and will pay your interest gross.

4
3) Nuke the site from orbit. It's the only way to be sure...Aliens??

5
I wouldn't worry. Filing the P85 is only a notification process and it's not compulsory. What matters is the facts - that you did actually leave the UK and if you did then you are not subject to UK income tax on non UK sourced income from that date, whether you filed the P85 or not. If you haven't filed the p85 then you can do that now and put the date you actually left.

I would advise you to da that and you can download one here:

http://www.hmrc.gov.uk/cnr/r_and_d.htm

There's more information on taxation of ovrseas residents here:

http://www.hmrc.gov.uk/pdfs/ir20.pdf

By continuing to pay tax on your UK sourced income you've done the right thing. Ditto continuing to pay National insurance contributions which will maintain your state pension rights. I filed a P85 when I left and I still get self assessment forms. I queried this with my tax adviser and the tax department said they just want to check I'm still living abroad.

The thing about a P85 is you won't get rebates under double tax treaties or split year treatment when you leave or go back without filing one. As my link says theoretically if you live in the UK for part of a year then you're liable to UK tax for the whole of the year, though the IR usually agrees to split the year under certain circumstances explained in the link.

There's nothing here you can't clear up quickly and easily with the IRD. If you're worried you you have overpaid or underpaid you can write to them and explain. In the case of honest oversights they're always amenable if you write to them first.

By the way, if you wish, you can avoid tax on GBP savings by transferring them to somewhere like Jersey rather than holding them with a UK branch.

6
Certainly is.

7
If you current bank allows you to have an address abroad, you do not need to transfer anything. You just fill in an R85 and get the interest paid gross.

8
You raise a good point NotAllThere but we're talking about different things. You're talking about how to get interest paid gross if it should never get taxed in the first place. I'm talking about how you put it outside the UK tax net altogether.

Filing an R85 does not alter your tax liability. It allows banks to pay you interest gross if your total UK sourced income (interest on savings plus any other UK income like rents received) is under the level at which your income starts to get taxed. If your UK sourced income is less than your annual tax free limit you shouldn't be taxed anyway so it just stops them deducting it at source and you having to claim it back.

If your UK sourced income is above your annual tax free limit then you will pay UK income tax on it whether you file an R85 or not.

Putting your deposits in Jersey means interest is not classed as UK sourced income in the first place and so it never counts as far as the UK tax net is concerned.

9
OK, but it's important to be clear. Not everyone has income in the UK above ~£5000

My only UK tax presence is a few thousand in a UK bank. IF you have other UK sources of income that take you above the UK tax threshold, then, yes, move to an offshore account. Otherwise, don't bother.

Also, don't forget to declare your savings to the Swiss tax authorities. You are liable to tax on the interest here.

10
With UK interest rates on bank deposits now next to nothing you can say that again

11
Does any body no what form needs to be filled in to claim back any tax deducted from interest if you have been living ourseas? also say if you have been living outside the UK for four years and you have been paying tax on the interest paid on your savings ( income is below the threshold) is there a way of claiming this back as well?

many thanks

12
Hi, does anyone know how long P85 refunds take? I handed mine in 2 months ago when I left, I think they owe me 2k ish!!

13
You'll probably have to wait until you complete your UK tax return for 09/10. The sooner you do that after 5 April, the sooner you'll get your refund. Unlike the Swiss tax authorities, the IR (beg its pardon, HMRC) doesn't pay interest on refunds it owes you

14
I have to complete a tax return? All I did was fill in my P85.

15
I recently went through this process and claimed back tax paid since 2004. You just need to speak to the tax people . They were very helpful although it did take 8 months to process the paperwork.

16
From what I remember (it was a while ago now) completing the P85 puts you into the remit of the Non-Residents Office in L'pool. You don't escape the UK tax net at all until you have been out of the country over a complete tax year (i.e. nearly two years if you leave at the end of April, just over one year if you leave at the end of March) and you don't escape it completely for getting on for 5 years, assuming you have no UK-generated income. If you have UK generated income that is above the personal allowance, you will pay UK tax on that regardless. As you are not in the country, you won't be on PAYE so HMRC have no way of knowing how much tax you owe unless you complete a tax return. So yes, if you are non-res, chances are you'll be sent a tax return, including non-res pages, shortly after after 6 April and you will have to complete one even if you haven't had to up to now

17
I know this was posted a while ago, but just for clarity, you don't have to close ISAs if you're no longer resident. You can keep any existing ones open and they will continue to earn interest tax-free, but you are no longer allowed to add anything to them or open new ones.

kodokan

18

OK, thanks for that, I guess a winter holiday with the proceeds is out of the question then, more likely 2010!! I will just have to put it to the back of my mind, along with the Swiss refund also. I spoke to the tax office, they told me that they sent me something yesterday in the post, so probably a tax return.

Cheers

19

Hi,

Hopingsomeone might be able to help.

I've beenliving and working full time in Switzerland since June 2010. When I left the UK I had been unemployed (onholiday ) since Sept 2009. It's also aSwiss company I work for.

The moveall happened very quickly and because at the time I wasn't claiming JSA, Ipretty much packed my bags and was on my way. Its been mentioned to me a couple of times that I should have informedthe IR and filled in some kind of forms, but due to laziness and a hatred ofall things form related I just ignored it.

I'vefinally decided to get my arse into gear and make sure everything is in orderand wanting to know with a P85 (which I'm guessing is what I should have filledout before departure) can I do this 19mths after I've actually left? Or perhaps it’s a job for an accountant, ifso should they be Swiss or UK based? IfSwiss has anyone got any good recommandations?

20
Apologies for the format, not sure what happened there!