self assessment - split year treatment

omarakil15

Hi,

I am new to self-assessment and to this site so apologise if these are basic questions about filling in my 2013-14 assessment.

I am an Italian citizen and have been non-resident and living overseas since I left the UK (I have been living in the UK in the period June 2010-July 2011) until I came to the UK in July 2013. I have a UK permanent employment and I intend to take up permanent residence or intend to stay for at least two years.

As I understand it, I should be eligible for split year treatment and I need to consider two separate situations for the year: a period up to July 2013 for which I am not liable to income tax, a period from July 2013 to April 2014 for which I am liable to income tax on income paid by my UK employer.

From April 2013 till July my wife and 2 kids have been living in the UK (they have since Sept 2011) in our house of property, in the same period I made remittance on our joint UK bank account of income coming from my employer overseas on which I paid my taxes in Italy (where I was fiscally resident till July 2013).

My questions are:
1. How to request split year treatment on the self-assessment online?
2. As I will be requesting split year treatment, should the income figures that I include on the self-assessment form only be those for income I have received since returning to the UK or does HMRC expect to see income for the whole tax year? If the latter, how do I indicate the part that I received while being resident elsewhere and how do I indicate the part that should be liable to UK income tax?
3. As my employer was based overseas, should I report income received under the “employment” pages or under “foreign income”?

purdyoaten

This is fairly technical stuff - not really ideal with a few days to go! You need real advice from a tax specialist, particularly on residency. I would not recommend attempting to completing your return without this. Good Luck!

Spidernick

Yes, it is. OP could be resident for the whole of 13/14 and potentially before then.

The first bit to look at is days in the UK from 6 April 2013 to the July 2013 date when (presumably) the UK employment started. It could get very messy and potentially treaty residence could be involved. Definitely get technical advice, take the £100 penalty and possibly some interest if tax is due (as I cannot see this being sorted in a matter of days) and look to get this sorted by the end of February and any tax paid then to avoid a 5% surcharge (if tax is due).

chrismac1

See my posts yesterday. File any old drivel for now, definitely do NOT take the £100 fine. Then get this matter sorted and a proper, accurate tax return done under re-submission. You have until 31 Jan 16 to do this, if you do it by 28 Feb 15 there is next to no chance anyone in HMRC will even have looked at it!

In my opinion, based on your post, you can claim split year treatment under the recently introduced Statutory Residence Test rules. If you are using standard HMRC software this option I believe is not available. Again, see my posts from yesterday - the mindset here is not to moan about the third rate service HMRC is offering, but to take the positives from this and just file anything for now to avoid the penalty.

See a professional. He or she will not be using the HMRC software because it is utter rubbish. I've done a couple of split year 13-14 tax returns using Taxcalc and they were a piece of cake, likewise your local guy will find this a breeze. It will be worth the fee because you will know HMRC are not going to come after you, and if they do you'll be able to fight hard with someone who knows how to deal with them robustly in your corner.

Spidernick

While I perhaps accept your point about the penalty from the other thread, there is absolutely no way you can state with any degree or certainty that split year applies here. There is nowhere near enough information. It's fine if you can go down the automatically resident or automatically not resident route, but once you get into 'connecting factors' that's when the fun starts. OP has family living in the UK all year (one connecting factor), almost certainly has 'accessible accommodation' (a second), may well have more than 90 days in the UK in 11/12 (a third) and so on.


Until we know this and the UK days from April 2013 to July 2013 it's all merely guesswork!