If you’re leaving the UK to live or work abroad, it’s possible that you may be entitled to a tax refund. As ever, the outcome depends on your personal circumstances and tax status, and it’s important to let HMRC know about exactly when you move overseas so that the right calculations can be made.

Who is able to claim tax back?

If you’re a UK resident and are moving abroad it’s likely that you’ll become non-UK resident for tax reasons and pay tax in the country in which you’re living rather than the UK. Claims can also be made by those who have been living or working in the UK (and who have consequently been in the UK tax net) and who are now moving to another country or perhaps returning to their home country.

Why might you be due a tax refund?

In the UK, every individual is generally entitled to a set of tax-free personal allowances each year. If you haven’t used these allowances, you may be entitled to a refund. There are another two situations which may also prompt a tax refund:

• If you’re an employee with tax ‘withheld at source’ and become non-UK resident part way through a tax year
• If you’re self-employed and have made ‘payments on account’ towards your expected annual tax liability and your changed tax status means those pre-payments will be more than your actual tax bill for the year

How do I claim tax back?

Claiming tax back will mean you’ll need to complete some specific forms from HMRC. It can be useful to work with a tax expert, especially if your tax affairs are complicated. There are also time limits to be aware of, and any claims must generally be made some time in the four years from the end of the tax year where you think you’ve overpaid.

Overpaid Income Tax

Situations in which you may have overpaid Income Tax generally occur when you don’t use all your personal allowance or you’ve pre-paid tax and experience a change of circumstances or resident status.

Overpaid Capital Gains Tax

You may find yourself having overpaid Capital Gains Tax (CGT) if you sell a UK property during the tax year and pay the tax due within 60 days based on your estimated taxable income for the year. If the actual taxable income turns out to be less, the overpaid Capital Gains Tax can be reclaimed on your Tax Return.

Claiming tax relief on employment expenses

You may be able to claim tax relief on your employment expenses too. This is because there are reliefs which can reduce the tax bill on your employment income, including any business expenses which are ‘wholly, exclusively and necessarily incurred in the performance of the duties of your employment’. For this type of claim it’s vital to keep accurate records and evidence.

Do be aware that if your employer reimburses you for employment expenses then a claim won’t be able to be made. To manage these claims, you’ll need to make use of a specific form or handle things through the submission of your annual self-assessment Tax Return.

Leaving the UK and supporting you to claim tax back

Our team has helped many British expats to exit and re-enter the UK tax system. Many have also had the experience of living or working overseas. With offices around the world, our team can provide up-to-date and intelligent information to help you make sense of the UK tax system. For more support contact our financial planning team.