Photo by Daria Shevtsova from Pexels
Have you been working in the UK with your working holiday visa or Tier 5 (Youth Mobility Scheme)? Know that you are entitled a tax refund, even if you leave in the middle of a tax year, but you could miss out on this if you do not file a tax return before you leave the UK.
The best course of action is to seek help from tax experts, especially in understanding the basics of how the UK tax system works. Most foreigners easily get confused with the process, resulting in errors. There are also instances where you need to determine if you overpaid taxes or not, or if you are entitled to a full personal allowance based on your domicile for tax purposes.
In the event that you are entitled to a full personal allowance, you should complete form P85 to get a refund. Make sure to attach parts 2 and 3 of your form P45, a certificate of pay and tax deductions that your employer will provide at the end of your employment. Make sure you have a UK bank account where your refund will be deposited.
What if you are self-employed?
You are only due a refund if you work in the construction industry. Still, you need to file a self assessment tax return before you leave the UK. You also need to pay any unpaid taxes you owe and inform HMRC that you are leaving the country. Otherwise, HMRC will continue to send self assessment tax returns to your old address that, when not completed, will be considered late returns.
Can you leave UK without paying taxes?
You might think you can get away with this when you reach your home country, but HMRC can still collect your dues through its reciprocal arrangements with other countries.