Returning to the UK -could I get hit by tax for time away?

gld73

I don't know if anyone else has experience of this and can tell me what is likely to happen.

I was a higher rate taxpayer in the UK, then left my job to work abroad for a charity. I left the UK in January 2009, paid tax on my (much lower!) new salary for the rest of that tax year, then received my salary tax-free from April 2009 to date, as I'm Non-Resident in the UK.

I'm going to be moving back to the UK in mid-August this year (7 day working weeks in developing countries hasn't been all bad, but I fancy getting back to the world of running water and 24hr electricity!). I've got a couple of interviews lined up, and am optimistic that I'll be employed in the UK from around Sep/Oct. I accept that when I do my self-assessment tax return at the end of the year, I'll have to retrospectively pay the tax on my currently not-taxed earnings from April to mid-Aug this year.

However, having read the HMRC6 document on residency etc, it says that people who used to live in the UK, then leave and are non-resident, then come back after fewer than 5 years away, can be classed as Temporary Non-Resident, and be liable for tax on ALL their earnings while they were away. :eek: Paying back tax on my half year earnings for this year I factored into my decision to move back; paying back tax on all 2.5 years salary is another matter!! I'm not earning the wages of oil workers etc who go off to lucrative foreign postings, and it's not like I earned enough to save a load of money to pay off any future tax liability arising.

Does anyone know when HMRC enforces this payment of back tax for all years away, and when it just makes you pay back tax for the tax year you return?

Thanks for any help you can give, my flight back to the UK is booked, and now I'm worried I'm going to have to jump straight on another one to stay away for another couple of years!

eurgbp

HMRC is hungry for our money these days, they can demand their "fair share" for sure

taxing

Hi

Temporary non-residence applies to capital gains tax - where you sell assets and make a gain. You don't mention 'gains' so I won't go in to detail.

For employment income, you are treated as non-resident from the day after you leave the UK provided your time abroad working covers a full tax year.

In year of return to the UK you should be able to have split year treatment so the overseas income pre your return should fall out of account for UK tax and you only get taxed on earnings from your return.

If you kept a house here and rented it out, then that is fully taxable in the Uk even while you are non resident (but you didn't mention this applied?).

Not sure why you didn't request split year treatment when you left in Jan 2009? The overseas earnings after you left would have fallen out of account, too.

Would be worth your while speaking to a local tax adviser.

Regards.

Cook_County

As taxing says you would normally file returns claiming the split-year concession.

gld73

Thanks, that's put my mind at rest that I shouldn't get hit with extra tax.

I didn't bother applying for split year treatment when I left as my pay was so low on my new salary that a few more quid missing didn't really bother me! Of course, that was when I'd left the corporate workforce on an idealistic urge to go off and do charity work. Now I'm coming back the other way, I'm aware of every penny I'm lacking