Tax Guide For Working Holiday Makers In The UK
Working holiday makers in the UK not only get to travel, but earn income at the same time. Unfortunately, any salary made in the UK is eligible for a tax deduction.
Any foreigner would feel like a fish out of the water without a good understanding of the tax rules related to a Working Holiday Visa. Ideally, you should seek professional help and advice from tax experts, especially where tax refund is concerned. Who better to answer all your questions, right?
However, it pays to know a thing or two about this concern. Here are questions you are likely to encounter and their corresponding answers.
Can I Claim A Tax Refund Even If I Leave The UK?
Yes. The very fact that you paid tax on the UK income you made as a working holiday maker, you are eligible for a tax back. But you must lodge a claim before you leave the country. As your application can take time, you should allocate a few days to a week between the time you stop working and your departure. As soon as your employment ends, you can start working on a tax rebate.
How Much Tax Refund Will I Receive?
The answer depends on how much income you made within a tax year. If it is below the personal allowance, you will get all the income tax you’ve paid while working during your holiday. For the 2014-15 tax year, the basic personal allowance is at £10,000, and £10,600 for the 2015-16 tax year. Say you earned £121,200 or more within the 2015-16 tax year, you will not receive any personal allowance and all your income is taxable.
How Do I Clam My Tax Refund?
There are two ways to do this: through a tax agency or DIY. Between the two, the former is more convenient and you can skip the tax lessons if you so desire. If you take the DIY route, it will definitely be challenging and there is a possible risk that you might make a mistake along the way. If you do choose to file a claim on your own, be sure to prepare the necessary forms, such as P45/P60. The P45 is usually provided to you by your employer. Forms P85 and P86 may be required whenever applicable.
How Can I Use A Tax Calculator?
If you want to find out in advance how much tax back you can claim there are several online tax calculators that you can use. One calculator will require that you have your P45 at hand for this process. What you need to do is to check the income and tax figures, and then input the numbers on the calculator. Just follow the directions indicated, and you will know exactly how much tax refund due to you.
I forgot to claim a tax refund from my previous holiday stint in the UK. Can I still claim a tax back?
You can claim tax rebate for 6 years in arrears, but you must first check if you have overpaid income tax in the previous years that you did file a tax back. You can refer to your forms P60 (End of Year Certificate) to collect the necessary information.
In the event that you have already left the UK before you were able to lodge a claim, you can work with tax experts to help you out.