How do I get HMRC to accept I'm on a low wage and live/work abroad?

edited 30 November -1 at 1:00AM in Cutting Tax
19 replies 2.7K views
gld73gld73 Forumite
234 Posts
Part of the Furniture 100 Posts Combo Breaker
✭✭
edited 30 November -1 at 1:00AM in Cutting Tax
Having had a search of the threads, I can't see one which mirrors my situation, so I'm hoping someone can give some advice. Sorry for the length!

I was a higher rate tax payer, paying tax through PAYE, until January 2009 when I had a fit of idealism and resigned to go and work for a charity abroad. I filled in the P85 to register as being a non-UK resident so I would be paid tax-free as my employer advised (with a covering letter detailing my situation, seeing as I wouldn't be contactable directly in the UK), and filled in the NRL1 form to get the gross rent from renting out my house (tax to be paid when I filled out a tax return). Even though I was living and working abroad, I wasn't surprised that my salary was getting taxed to the end of the 08/09 tax year, but assumed things would be okay from April 09.

HMRC wrote to me a couple of times asking for all income I'd received in the last 5 years, even though I've filled in either short tax forms or tax review forms every previous year so they should have had all of that already; my parents wrote to say I'd respond when I was back in the UK on leave in Aug/Sep for 3 weeks. I did that, but every day of my holiday was on the phone to different tax offices as nobody could answer why I was still getting taxed at the "emergency" tax rate on my very low earnings rather than being tax-free as all my colleagues are. Only on the last day did one tax office finally tell me that my employer hadn't filled in the form to say I was employed by them, so it turned out the tax I was paying wasn't linked to my NI number and wasn't being paid by me as far as HMRC was concerned, and also explained why no tax office knew which one I came under and kept passing me on. (I work in the back of beyond in obscure places, so don't see my payslips produced back in the UK which might have indicated this to me).

With no end to the tax problems in sight I had to put my house up for sale (now sold), but finally got my employer to send the correct form, and finally got HMRC to agree that I should do a tax return (even this took multiple phone calls!). So now I'm paying basic tax rate - not ideal, but a slight improvement. I'm back abroad, and apparently letters were sent from HMRC confiming I'd have to do a tax return but they'd write again to tell me which sort. Now I've (via my parents) been sent a letter missing out that step, and just jumping to them doing an incorrect calculation of what I owe them (hundreds of pounds, when it should be them paying me that back at least!) and another one giving me my tax code for 09/10, still not accepting I'm a skint charity worker living and working abroad!

I've tried to do my tax return on-line without their "invitation" to do it, but for some reason it won't let me proceed, even though I now have a UTR etc and it acknowledges it's me that's logged in. I'll be back in the UK for a couple of weeks at Xmas, but have a horrible feeling HMRC will be practically shut down for the holidays and I won't be able to resolve things. It'll be months before I can get back again after that.

Any ideas of how to resolve it? I can't afford not to, so I'm starting to think I'll just have to give up and come back to the UK where at least I'll be paid a good salary (if I can get a job!) and will be paying UK taxes justifiably. Thanks for any guidance you can offer.
«1

Replies

  • Voyager2002Voyager2002 Forumite
    14.5K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭
    Firstly, when you refer to your employer, are you talking about the job from which you resigned to go abroad, or or the organisation that has arranged your volunteer placement? That makes a real difference, as I'm sure you appreciate?

    Is your work in Africa arranged through VSO, or another member of the British Volunteer Programme? They do have people in their UK offices who can handle this kind of problem for you. They should also be paying NI contributions for you under Class 3 (Development Worker), a special category created at the request of VSO.

    Personally, I would write to my MP (the MP representing the constituency with your last UK address) about this, and send a copy of the letter to the tax office that seems to be dealing with your affairs. That worked for me when I faced minor tax hassles after leaving the UK to work in Africa: I am writing this from Benin, (West Africa, next to Nigeria).

    And just being nosy: where are you, and what are you doing?
  • edited 20 November 2009 at 9:59AM
    PlutoinCapricornPlutoinCapricorn Forumite
    4.6K Posts
    Part of the Furniture Combo Breaker
    ✭✭✭✭
    edited 20 November 2009 at 9:59AM
    Your situation is certainly out of the ordinary, and outside my direct experience.

    However, I did get letters from HMRC each April for a few years asking me about my employment history, despite the fact that I was completing self-assessment returns for the years in question. I eventually realised that the problem was caused by the fact that I had left PAYE work to become self-employed, and had held on to my P45 as I had no new employer to give it to. I sent in my P45 with a covering letter and that sorted things out. HMRC have different departments and they do not always communicate with each other. Did the job you resigned from give you a P45, and did you give this to the voluntary organisation?

    voyager's suggestion is spot on: organisations that send people overseas should be geared to help with the inevitable tax problems.
    Who having known the diamond will concern himself with glass?

    Rudyard Kipling


  • gld73gld73 Forumite
    234 Posts
    Part of the Furniture 100 Posts Combo Breaker
    ✭✭
    My previous employer provided a P45 (to me and HMRC), but the charity I now work for didn't get a copy as I'd requested (I was out of the country by the time the P45 was produced, so assumed my new employer would flag up if it hadn't been received, and send a P46 instead.). Unfortunately the charitable nature of my employer does not extend to its expat staff, so although they acknowledge with hindsight they should have done the right paperwork a few months ago, I'm on my own trying to sort out the resultant mess I'm in! (Although it's a big charity, it's one of the few that doesn't have a big admin and PR set-up eating up funds in the UK, so the staff in the HQ have got more important things to worry about than 1 employee losing a third of their salary unfortunately!).

    I can only get back to the UK 2 or 3 times a year for 6 or 7 weeks in total, the rest of the time I'm only contactable on an overseas mobile phone (which HMRC won't contact me on), or by email when I can get internet access (and again, HMRC won't contact me by email). I work in former war/conflict areas, clearing landmines and unexploded ordnance - so I spend enough time in genuine minefields without getting stuck in a proverbial tax one too!!
  • gld73gld73 Forumite
    234 Posts
    Part of the Furniture 100 Posts Combo Breaker
    ✭✭

    And just being nosy: where are you, and what are you doing?

    I'm in Cambodia - though I was previously in Angola, so we were practically neighbours!
  • Voyager2002Voyager2002 Forumite
    14.5K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭
    gld73 wrote: »
    I work in former war/conflict areas, clearing landmines and unexploded ordnance - so I spend enough time in genuine minefields without getting stuck in a proverbial tax one too!!

    Ah: I know the organisation. One of my friends once decided to work for them -- because his office job in England was too stressful!
  • Cook_CountyCook_County Forumite
    3.1K Posts
    Part of the Furniture 1,000 Posts
    ✭✭✭✭
    You are almost cetainly still UK resident under current HMRC interpretations of case law, because you have not left to settle permanently anywhere (I certainly don't see how a minefield strewn foreign country where you do not have permanent right to reside could be a country where you have settled, although I may have misunderstood).

    I would contact your MP and tell him or her that the UK needs a statutory residence test so that you can know for certain what your UK tax position is.
  • firesidemaidfiresidemaid Forumite
    2.1K Posts
    Bake Off Boss!
    ✭✭✭✭
    if you are back in the UK for a potential 'working' day over xmas, i would consider turing up at your local/regional tax office to insist on them involving their 'specialists' and outstay your welcome for the day until it is resolved/you have it in writing even if it is via fax.

    sorry if others think this will not work/is not worth it.

    i do understand that this should not be necessary since you have been so honest with them and you are doing an excellent job abroad.
  • I don't know anywhere about this to advise you fully
    but some things to bear in mind:
    - the people you speak to on the phones at HMRC are not actually tax experts- they are trained to read out information so they don't always know what they are talking about
    - the issue of taxation of people working abroad is very complicated and just because you are currently working abroad does not necessarily mean you are not subject to UK tax
    - your best bet and easiest solution is to try and find a professional to sort it out for you
  • John_PierpointJohn_Pierpoint Forumite
    8.4K Posts
    Part of the Furniture 1,000 Posts
    ✭✭✭✭
    - your best bet and easiest solution is to try and find a professional to sort it out for you

    One working "pro bono" presumably? As someone who was refused access to the on-line system for reasons I still don't understand, and ended up appealing a fine - do we know why the original poster is not allowed to do a tax return from abroad if the system thinks he is still resident in the UK?
  • gld73gld73 Forumite
    234 Posts
    Part of the Furniture 100 Posts Combo Breaker
    ✭✭
    You are almost cetainly still UK resident under current HMRC interpretations of case law, because you have not left to settle permanently anywhere (I certainly don't see how a minefield strewn foreign country where you do not have permanent right to reside could be a country where you have settled, although I may have misunderstood).

    The charity has about 30 other expats in the same situation as me (i.e. British and working in the same sort of countries) and their salaries are tax-free, so I don't think that can be the case. Or if it is, then HMRC has made 30 mistakes and just got my assessment right, rather than the other way round!

    Ah well, looks like I'll just have to try and get an in-person appointment if the offices are open when I'm back - and if that still doesn't work, look for a career change. :confused:
This discussion has been closed.
LATEST NEWS AND GUIDES

Balance transfer credit cards

Shift existing card debt to 0% interest for up to 31 months

MSE Guides