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bigduckontax, Accountant
Category: Tax
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HMRC says I have to tell them if I am: leaving the UK to

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HMRC says I have to tell them if I am:
leaving the UK to live abroad permanently
going to work abroad full-time for at least one full tax year
The tax year runs from 6 April to 5 April the next ye I am not sure whether I will be in France for a full tax year.
I don't know what the P85 does and I don't know whether I should fill it in. What If I come back to the UK earlier?If I fill in the P85 this year, do I get a re-bait from UK tax paid this year?
or does it make my income this tax year subject to french taxation?
JA: Which tax year is this for?
Customer: 2021-22
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: Im leaving the UK in October If I fill in the P85 this year, do I get a re-bait from UK tax paid this year? or does it make my income this tax year subject to french taxation?

Actually HMRC does not say that and many go without bothering to tell that Department. However, it is a good idea so to do as on receipt of the form P85 HMRC will classify you as non resident and the form provides for the refund of tax overpaid on departure. In very general terms if you spend more than 183 days in France in any one year you will be liable to French taxation on your world wide income. However, French taxation is so complex and so constantly changing that the employment of a local practitioner is essential. I have an old working colleague who emigrated to France. His Army and Civil Service pensions are not taxed there, but his State Pension is.

Customer: replied 13 days ago.
OK, but I am 27 and I will have no income from the UK while I am in France. I am not 100% sure how long I will stay in France. At this point, I am trying to understand if there is any benefit in me completing the form now.
Customer: replied 13 days ago.
What does the 'refund of tax overpaid on departure' include? All tax paid in the UK since March 2021?
Customer: replied 13 days ago.
April 6th 2021

No, the tax paid in the tax year of departure. In my opinion yu should complete a P85 when you quit these shores. You will find life much easier if you do.

Customer: replied 13 days ago.
I am on PAYE. Wouldn't I just get a re-bait for the tax I overpaid in April 2022 anyway, even if I don't complete the form?

Failure to complete the form could expose you to a Tom Tiddlers ground of arguments with HMRC as they try to tax you on your overseas income when you do not live in the UK.

Customer: replied 13 days ago.
Ok, understood, want to avoid that.. I still don't understand what you mean by 'refund of tax overpaid during the year of departure'. I pay PAYE April 6th to October 2021. No other Income Streams. I depart November 2021.
What is the tax overpaid during the year of departure?

The tax paid to November 2021. Knock off the Personal Allowance (PA) and pound to a pinch of salt a refund will be due.

Customer: replied 13 days ago.
But wouldn't that refund be due if I were simply receiving no income from November 2021 to April 2022 , regardless of whether I was a non-resident in that period? I have overpaid the same amount during a single tax year regardless. Would I have to fill in a different form to the P85 if I wanted a rebait whilst retaining UK tax residency?

The P85 would get it to you faster.

Customer: replied 13 days ago.
The issue I have is that; it is a new and unknown job and city. So, if it turns out to be a distaster and I want to come back before 183 days, I haven't managed to become a non-resident from the UK and so I am actually liable for taxation on that income. If they have no form and the Euros stay in my french account, it looks like a break in employement. If I have filled in the form, HMRC know my 'employer’s name and address' which gives them the ability to claim on it and makes everything more complicated. I'd rather file the P85 retrospectively once I satisfy the non-resident criteria and can make a clean break for a full tax year. What is the deadline for completing the P85 form?

There is no time limit on the submission of a P85.

Customer: replied 13 days ago.
Ok, in the worst case. How does double taxation work? How would I pay tax in the UK on my French income? Do they apply UK tax to my French take home salary?

They well might and you will have to look to the treaty for protection.

Customer: replied 13 days ago.
How does the interaction initiate with the HMRC? You receive a letter or email asking about salaries?

NO, you merely self assess as normal.

Customer: replied 13 days ago.
basically, if you don't declare it, they would only discover with an audit?

Yes, but allowing that to happen would be most inadvisable with criminal liabilities and hence possible imprisonment. Remember they did not nail Al Capone for anything except tax evasion.

Customer: replied 12 days ago.
In which year's self-assessment and by what submission date would I have to declare the 2021-22 french income? I have never done one before.

By 31 January 2023.

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