P85 refund not possible if you are on self-assessment?

intalex · 16 July 2019 at 2:13PM

I've recently started a 1-year contract to work overseas and received my final pay in the UK at the end of April, which means I effectively paid more tax than I should on the basis I won't have any more UK employment income for the rest of the tax year.

I submitted a P85 via my HMRC online account to get a refund of the overpaid tax (quite sizeable in my case), only to be told that I have to wait until 6th April 2020 to submit my tax return and claim any refund of the overpaid tax. I was told this applies to me "because I have been on the self-assessment system" and P85 only applies to those whose tax is deducted via PAYE only and who haven't been doing a self-assessment.

I feel unsure about not being able to get back my overpaid tax even though it is very easy to calculate how much tax I have overpaid on the basis that I won't be earning any employment income in the UK for the rest of this tax year.

Would be great if anyone with more knowledge of this matter could advise if this is the correct process.

Thanks in advance!

BoGoF · 16 July 2019 at 2:19PM

Based on what you have said you will remain resident in the UK for tax purposes and as such any foreign earnings will be taxable in the UK. Therefore it will not be possible to calculate anything until after the end of the tax year.

* this is based om information that may not be up to date. It used to be the case that you had to be out the UK for a complete tax year to be considered non resident but I believe there is now a 'statutory residence test'

intalex · 16 July 2019 at 3:37PM

Thanks BoGoF, as I'm not domiciled in the UK and left the UK to work full-time overseas, with less than 31 days' employment in the UK and less than 91 days spent in the UK overall this tax year, I am (will be) considered non-resident in the UK for tax purposes.

But I guess I have to wait out this tax year to confirm this status seeing as number of days present/employed in the entirety of the tax year is of significance.

Begs the question why the P85 is of any use...

sheramber · 16 July 2019 at 6:15PM

intalex wrote: »

Thanks BoGoF, as I'm not domiciled in the UK and left the UK to work full-time overseas, with less than 31 days' employment in the UK and less than 91 days spent in the UK overall this tax year, I am (will be) considered non-resident in the UK for tax purposes.

But I guess I have to wait out this tax year to confirm this status seeing as number of days present/employed in the entirety of the tax year is of significance.

Begs the question why the P85 is of any use...

It is of great use to those who are not the SA system.

The clue is in the P in P85 ( PAYE)

intalex · 17 July 2019 at 3:47PM

So I received a call back (on request) from HMRC letting me know they'll be sending me an in-year tax return to complete (manually) and return, on the basis of which they'll refund me the overpaid PAYE now.

Then after the end of the tax year, I'll be able to edit the tax return with any additional income e.g. savings interest, and pay any extra tax due by the following 31st January.

Dazed_and_confused · 18 July 2019 at 10:35AM

Then after the end of the tax year, I'll be able to edit the tax return with any additional income e.g. savings interest, and pay any extra tax due by the following 31st January.

Probably just wording but I don't think you'll be able to "edit" anything, you'll need to file a brand new return, some of the details included will be the same as the in-year return you are being allowed to file.

And don't forget to include any in-year repayment you receive in the relevant box on the normal return you file, a recent poster on here has come unstuck by failing to declare that on a Self Assessment return.

intalex · 9 February 2020 at 11:35AM

Just an update, after being given the runaround for a while (largely because of first line phone advisors' limited knowledge), my issue finally got escalated to someone in Complaints who swiftly handled my manual tax return (SA100, SA102, SA109, SA110) to refund the overpaid tax, and also went the extra mile to append a pension contribution (which I had subsequently made) to my tax return and refund the additional tax relief relating to this.

Just wish the first line phone advisors were better informed on the process and/or whom to refer the case to, as it would have saved me a few months' wait and time chasing up, not to mention the cost of all the international calls I had to make as well.

P85 refund not possible if you are on self-assessment?

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