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You can use a P85 Form to notify HMRC if you’re planning to leave the UK permanently or to work abroad for a minimum of one tax year. Submitting a P85 helps HMRC work out your tax status and ensure that you pay the right amount of tax (or claim a refund if you’ve overpaid).

Do I need to complete a P85 Form?

You should complete a P85 form if you don’t normally submit Self Assessment tax returns, but need to tell HMRC you’re leaving the UK. If you usually send a Self Assessment return you can use that instead either by completing the online section of the form or by including an SA109 supplementary form if you send paper returns.
 

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Why do HMRC need me to submit a P85?

HMRC use the information you provide on the form to check that you’ve paid the right amount of tax for the year.

For example

When you work for an employer long-term, they normally calculate your tax on the basis that you will claim the full Personal Allowance over the year.

If you leave the UK mid year, then you might not use all of your allowance, and will be owed a tax refund.

Submitting a P85 (or a tax return if you use that instead) also helps HMRC understand your tax resident status – for example, in case you pay tax in different countries. Tax residency is complex, and is based on the connections you have to a country. It is possible to be a tax resident of more than one country simultaneously.

Why is my tax residence status important?

Your tax residence affects where you pay tax on any earnings. For instance, if you leave the UK for a short holiday you’re unlikely to need to pay income tax in the country you visit, so won’t need to notify HMRC.

If you earn money from an overseas employer, or if you work overseas for a UK employer, it gets a bit more complicated. The P85 helps HMRC work out how much tax you need to pay, and where. It also reduces the risk of having to pay tax twice on the same income if there’s a double taxation agreement in place between the two countries!

 
Learn more about our online accounting services for businesses. Call 020 3355 4047 to chat to the team, and get an instant online quote.

About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.

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