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bigduckontax, Accountant
Category: Tax
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I am self-employed and currently filling out my self-assessment

Customer Question

I am self-employed and currently filling out my self-assessment for 2013-2014. I left the UK in the 2013-2014 tax year, moving to work full-time in Germany. Having looked at the notes, I am eligible for split year treatment.
1) If I left the UK on 1 September 2013, am I taxed in the UK on 1 September or in Germany? I.e. does my accounting period end on 31/08/2013 or 01/09/2013?
2) On the self-employment form, do I need to state that my accounting date has changed permanently? Or will that confuse things? (For reference: box 11 on the self-employment form). I know I need to fill in when my accounting period ended (hence the question above).
3) Has my basis period now changed in line with the accounting year or does the basis period still end on 05/04/2014?
Thanks for any advice you can give me!
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
First priority, if you have not done this already is to fill in a form P85 and send it to your tax office. This can be done on line. HMRC will then make you non resident for the tax year following your date of departure and also split the year of leaving into two portions, one resident and one non resident. You will then, in general terms, be taxed in the UK 6 April to 31 August. Here is the advice of Wealth Protection Report [edited]:
'If you leave the UK permanently HMRC will usually accept that you are non UK resident from the date of departure. If your departure is not permanent then you may remain UK resident for three years until your position is reassessed. In addition if your absence is not for a complete tax year the Revenue will often class you as remaining UK resident.'
So there you have it, you become non-resident on 1 September 2013. Have a look at this web site, I think you will find it very useful in explaining your position:
http://www.wealthprotectionreport.co.uk/public/241.cfm
Your basis period may well change if you have finally ceased self employment in the UK. Here is HMRC advice on the matter:
'Basis Period
This is the period used to identify the profits which are taxable in any particular tax year (normally the 12-month period up to the annual accounting date).
Relevant boxes (64 and 65 on the Self-employment (full) page SEF 4) should be completed by the taxpayer to indicate the start and end dates of the income tax basis period.
In form SA200 cases you should only complete boxes 3.12A and 3.12B, to indicate the start and end dates of the income tax basis period, where an entry has been made on the return in box 3.2 or 3.3.'
If you are indeed terminating self employment do not forget to claim the overlap relief sculling around the tax account from from earlier periods.
I do hope I have helped point you in the right direction.
Customer: replied 2 years ago.

Hi Keith,

Your information on when I would become non-resident is immensely useful, thank you.

I had not filled in a P85. Somewhat idiotically I didn't realise I needed to. I will do that now. I have located the PDF but you say I can do it online - how?

I have ceased self-employment in the UK but am still self-employed in Germany.

Should my basis period therefore be 06/04/2013 to 31/08/2013?

I don't really understand your point about overlap relief. Could you clarify?

Thanks again for your help!

Expert:  bigduckontax replied 2 years ago.
Put 'Fillable on line hmrc gov fillable P85' into your search engine and the relevant data will be revealed for filing on line. You can always print off a paper copy and file that by post.
Correct, you are in a closing self employment situation.
Depending when you commenced self employment or possibly subsequently [ie when self assessment was introduced] you may have been taxed twice in one year on the same income. The double taxation suffered is overlap relief and can be recovered when you go out of business; merely deduct it from your declared profit.
Please be so kind as to rate me before you leave the Just Answer site.
Customer: replied 2 years ago.

Hi Keith,

I certainly will rate you, thanks.

Having read through the P85, it appears to ask me questions about employment abroad. Does this form still apply to me if I'm self-employed abroad?

There was one question in my original post that you didn't answer:

On the self-employment form, do I need to state that my accounting date has changed permanently? Or will that confuse things? (For reference: box 11 on the self-employment form). I know I need to state that my accounting period ends on 31/08/2014.

Expert:  bigduckontax replied 2 years ago.
Sorry, yes you do need to tell HMRC that you have terminated your UK self employment and your basis date has changed. When you start again in the UK, if you ever do, then the whole caper will start afresh.
Yes, you must complete the P85, it makes things so much easier. On the bottom of the form it asks you about why you cannot produce a form P45, You could use this space to advise that you have ceased self employment.
Customer: replied 2 years ago.

Hi Keith,

Thanks for confirming that.


There was one question in my original post that you didn't answer:


On the self-employment form, do I need to state that my accounting date has changed permanently? Or will that confuse things? (For reference: box 11 on the self-employment form). I know I need to state that my accounting period ends on 31/08/2014.

It would be great if you could, then I think my initial queries will be fully and expertly resolved - thank you!

Expert:  bigduckontax replied 2 years ago.
Actually, I did viz
'Sorry, yes you do need to tell HMRC that you have terminated your UK self employment and your basis date has changed. When you start again in the UK, if you ever do, then the whole caper will start afresh.'
bigduckontax, Accountant
Category: Tax
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Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.

Thank you for your excellent support.

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