How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4191
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I have just been let go from my company with a settlement in

Customer Question

I have just been let go from my company with a settlement in excess of £55,000. I plan to move abroad to look for work. Is it possible to get any form of tax rebate as I have worked in the UK for only 23 days in current tax year and will not be in the UK for longer than 60 days this tax year
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

When you originally left the UK did you submit a P85 to your tax office to notify them of your departure? If you did not you should do so immediately. This can be done on line.

Your question is a tad confusing and needs a spot of clarification. The current tax year is 14/15 and you say you will not be in the UK longer than 90 days in that year. You then also state that you worked in the UK for only 23 days in the current tax year; do you actually mean the 13/14 tax year?

Please be so kind as to elucidate so I can continue to answer your request more fully.
Customer: replied 3 years ago.

I finished at my company on the 01/05/14 and expect a final payment for compansation by the 6th of June 2014. I will receive 55k in lue of notice and 95k compensation. I will move abroad and look for work as soon as this is paid. Hope this clarifies the position further.

Expert:  bigduckontax replied 3 years ago.
You will only be treated as non resident in the UK from the day after you leave the UK permanently. You should notify your tax office of your departure on form P85. Please have a look at HMRC's advice sheet 'Income Tax when leaving the UK.'

Unfortunately all your emoluments are being paid before this date and so a liability to UK taxation arises. You are receiving a total of 150K. From this you can deduct your personal allowance (PA) of 10K. Of the compensation payment 30K will be exempt taxation leaving a liability on 105K. You are 5K over the 100K limit so loose a quid of your PA for every GBP 2 over the limit reducing your PA to 7.5K. Thus taxation will apply to 150K - 30K - 7.5K = 112.5K. This will be taxed at 20% for the first 31.865K = 6.373K and at 40% for the rest 112.5 - 31.865K = 80.635K = 32.254K: total tax due 38.627K. This is the worst case scenario.

HMRC may be prepared to split the 14/15 tax year as at the point of departure and treat you as non resident thereafter. This would reduce your liabilities considerably, but don't bank on it! I would advise you to retain a trusted, local accountant, experienced in this area of taxation, to negotiate with HMRC as part of your departure preparations.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.