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You can use a P85 Form to notify HMRC if you’re planning to leave the UK permanently or 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?

Why do HMRC need me to submit a P85?

Why is my tax residence status important?

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, by including an SA109 supplementary form.

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

You are a UK resident if you have always lived in the UK and never lived in another country. There’s no minimum amount of time you must spend in the UK to make you a tax resident. You’re a tax resident for a particular year if you spend at least 183 days in the UK during that tax year. It is possible to be a tax resident one year, and not the next, or vice versa.

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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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