Q and A Session - Claiming Back Taxes If You Are Emigrating From the UK
Emigration from recession-hit Britain hit a record level in 2008, with nearly 500,000 people leaving the UK for a new life overseas.
Around 70% of these were foreign nationals returning to their native countries - the remaining 30% were UK nationals starting a new life abroad in countries like Australia, Spain and France.
With the recession still yet to show any real signs of improvement, these emigration figures look set to continue growing at least until next year as more and more people in Britain choose to head abroad to avoid the economic turndown.
And yet.
Of the large numbers flowing out of Britain each day, many are completely unaware that they can claim a tax refund when they leave Britain.
In this Q&A session we shed some more light on the matter.
First we'll explain when, why and how much you will be able to claim - then take a look at how to go about claiming a tax refund if you are eligible.
1.
Can I claim a tax refund if I am leaving the UK? Almost certainly.
If you are working in the UK and leave Britain part-way through the tax year it is highly likely that you will have paid too much tax by the time you quit your job.
2.
Why am I owed a tax refund? Everyone in Britain is entitled to an annual tax-free allowance.
It's an amount of money each of us can earn before we have to pay tax - and it's currently set to £6,475 a year.
The amount of tax you pay each time payday comes around is nearly always based upon the assumption that you'll be earning that same amount each week / month for the rest of the tax year.
Let's illustrate the problem with an example.
Say you have an annual salary of £25,000 and are paid monthly.
The tax office calculates how much tax you should pay based on the assumption that you'll stay with that job and earn the full £25,000 during the tax year.
You quit your job and leave the UK for sunny Australia half-way through the tax year.
You've been paying tax on £25,000 but remember - it's only six months into the tax year so you've actually only earned half that figure - £12,500.
Now because the amount of tax you pay increases as your income goes up, the amount of tax paid on £25,000 is much, much greater than the amount of tax that is paid on £12,500.
The net result? A tax overpayment of nearly £650!! 3.
How much can I claim back? The precise amount you'll be able to claim back will depend upon your earnings and the total amount of tax you have paid.
When you leave your employer they'll give you a P45 detailing a) how much you've earned and b) how much tax you've paid (both since the beginning of the tax year).
Once this has been received, follow the link below and check out our free UK Tax Refund Calculator - it will show you how much you could claim.
Simple.
4.
I've already emigrated - can I still claim? If you have emigrated since April 2004, you can still claim - but our advice is to act fast.
The January 31st deadline for PAYE tax claims is approaching, and after this date we'll be unable to submit claims for the 2004/5 tax year.
Around 70% of these were foreign nationals returning to their native countries - the remaining 30% were UK nationals starting a new life abroad in countries like Australia, Spain and France.
With the recession still yet to show any real signs of improvement, these emigration figures look set to continue growing at least until next year as more and more people in Britain choose to head abroad to avoid the economic turndown.
And yet.
Of the large numbers flowing out of Britain each day, many are completely unaware that they can claim a tax refund when they leave Britain.
In this Q&A session we shed some more light on the matter.
First we'll explain when, why and how much you will be able to claim - then take a look at how to go about claiming a tax refund if you are eligible.
1.
Can I claim a tax refund if I am leaving the UK? Almost certainly.
If you are working in the UK and leave Britain part-way through the tax year it is highly likely that you will have paid too much tax by the time you quit your job.
2.
Why am I owed a tax refund? Everyone in Britain is entitled to an annual tax-free allowance.
It's an amount of money each of us can earn before we have to pay tax - and it's currently set to £6,475 a year.
The amount of tax you pay each time payday comes around is nearly always based upon the assumption that you'll be earning that same amount each week / month for the rest of the tax year.
Let's illustrate the problem with an example.
Say you have an annual salary of £25,000 and are paid monthly.
The tax office calculates how much tax you should pay based on the assumption that you'll stay with that job and earn the full £25,000 during the tax year.
You quit your job and leave the UK for sunny Australia half-way through the tax year.
You've been paying tax on £25,000 but remember - it's only six months into the tax year so you've actually only earned half that figure - £12,500.
Now because the amount of tax you pay increases as your income goes up, the amount of tax paid on £25,000 is much, much greater than the amount of tax that is paid on £12,500.
The net result? A tax overpayment of nearly £650!! 3.
How much can I claim back? The precise amount you'll be able to claim back will depend upon your earnings and the total amount of tax you have paid.
When you leave your employer they'll give you a P45 detailing a) how much you've earned and b) how much tax you've paid (both since the beginning of the tax year).
Once this has been received, follow the link below and check out our free UK Tax Refund Calculator - it will show you how much you could claim.
Simple.
4.
I've already emigrated - can I still claim? If you have emigrated since April 2004, you can still claim - but our advice is to act fast.
The January 31st deadline for PAYE tax claims is approaching, and after this date we'll be unable to submit claims for the 2004/5 tax year.
