Tax refund - left UK part-way thru year to travel

chrisc_20

Question for you money-saver geniuses!

I left the UK to go travelling overseas in October '08. I was working full time from the start of the tax year in April '08 until I left in mid October - obv paying tax that whole time.

I duly completed a 'leaving the UK' form and sent it to my tax office. As I understood, tax is calculated over a 12 month working period, and as I had stopped working part-way through the year, I thought I would be entitled to money back - as I would have paid too much over those 5 months from April to October?

I then heard back that I would not be entitled to a refund as I was not going to be out of the UK 'for a complete tax year'. I notified the Inland revenue on my form that I would return to the UK in November '09, I realise this is not a full tax year spent outside the UK, but I fail to see the relevance of that? As an aside, they told me to keep a record of my earnings while abroad, should I work.

As the 08/09 tax year is now complete, I wondered if I should reapply for the refund, or perhaps one of you guys explain why I am not entitled to one regardless?

Many thanks in advance!!

fengirl_2

You need to write back to your tax office pointing out that you have no intention of working while you are abroad and would they please process your refund.

chrisc_20

I did write to them again but heard nothing back.

I phoned them regarding it but the guy said something about how I would have got it if I had stayed in the UK, and not gone abroad.

It's frustrating as I feel I have been done a bit. Just over a simple communication issue.

Freddie_Snowbits

I think you will find that tax is calcuated to the day you became 'Not Ordinarily Resident' in the UK and the tax allowance was reduced to reflect this.

You cannot have both, if you were going away for more than a year and working, this is a benefit, if you are going for less than a year, you may had been ill advised.

http://www.hmrc.gov.uk/manuals/rgmanual/RG1.5.htm

chrisc_20

Sorry, Freddie_Snowbits, I'm a bit of a dunce when it comes to all this tax business, can you explain that again for me?

I've only gone abroad to see some other countries, I'm still a UK resident right?

Surely I'm allowed to earn x amount before I pay ANY tax, yet I've paid tax right from the word go in April. Confused!!

Sorry to be a pain!

dzug1

chrisc_20 wrote: »

Sorry, Freddie_Snowbits, I'm a bit of a dunce when it comes to all this tax business, can you explain that again for me?

I've only gone abroad to see some other countries, I'm still a UK resident right?

Surely I'm allowed to earn x amount before I pay ANY tax, yet I've paid tax right from the word go in April. Confused!!

Sorry to be a pain!

Yes - you are allowed to earn a certain amount before paying tax.

But that amount is calculated as a monthly (or even weekly depending on how often you are paid) amount even though it is expressed as an annual figure. The intention is the tax you pay is evened out over the year - not that you don't pay tax for a bit then suddenly start paying it.

chrisc_20

Oh i realise that. It's the evening out of the tax over an assumed period of 12 months of earnings that i have a problem with given i only worked 5. On the salary i was on the first 3 months or so would work out tax free months essentially. However i paid a hundred odd quid each month. Basically i would have been better leaving for my travel's in april to ensure i was fairly treated taxwise i reckon. Either that or this whole thing is way over my head...

fengirl_2

If you had been going abroad to work, HMRC's response to your claim would have been correct. You have to be out of the UK from 6 April one year to 5 April the next in order to be non resident and therefore not liable to tax on your overseas income.
However, you will remain resident in the UK for tax purposes as you will not be out of the UK for a complete tax year. Therefore, if you were working abroad, your overseas earnings would be liable to tax, so HMRC could not make a repayment until your total worldwide income for the year was known. BUT as you are not and will not be working overseas, all that is irrelevent and you are entitled to your refund now.
Suggest you ring HMRC and point this out - speak to someone senior if necessary.