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Where Taxpayers and Advisers Meet

Self Assessment - Non-resident but may become resident.

Hard_rock_geo
Posts: 2
Joined: Thu Aug 09, 2018 12:06 pm

Self Assessment - Non-resident but may become resident.

Postby Hard_rock_geo » Thu Aug 09, 2018 12:35 pm

I have a question regarding what I should do to make sure I am on the right side of HMRC.

To summarise, I left the UK on January 16th 2018 to work in the middle east (left my fulltime UK job and became self employed abroad - invoicing a UK company). My plan is to remain in the middle east working on this project until May 2019. As such, based on me working full time abroad and spending less than 90 days in the country I would not be classified as tax resident of the UK.

So when I left, I filled out a P85 form to inform HMRC I left the country and then received a tax rebate, as I qualified for the split year treatment from January 2018 to the end of the tax year.

However, now it is looking reasonably likely this contract will end in January 2019. At which point I will likely return to the UK and start fulltime work there. So the split year treatment in 2018, and all my earnings in 2019 will be taxable in the UK. The thing is, I wont know this until much closer to the time, probably around Christmas.

The issue I'm foreseeing is this: If i become tax resident of the UK I will need to submit a self assessment tax return for last year (January 2018 to April 2018) this year. There is also a deadline to register for self assessment on the 5th October this year. Paper tax returns will need to be sent by 31st October and online by 31st January (2019). However, I will only know if I will become tax resident in the UK in January 2019, so if i do become tax resident I will be 3 months late to register for self assessment. Will this result in a penalty, or will HMRC be more reasonable and understand I couldn't do this at the time?

I did think about registering and submitting a tax return for last year anyway, just including the non-resident part, before the deadline of October 31st (needs to be the paper return as the split year treatment cannot be done online for some reason). But this would still give me the same problem, that tax return would not be accurate if i return to the UK in January 2019 as the split year treatment would not count and i would be tax resident of the UK for that period.

Basically, I want to make sure I'm doing everything by the book, but as I see it now, circumstances might mean I am months late to complete a self assessment tax return if i need to which I'm worried will come with huge fines. I did try to do lots of research online but didnt come up with much. This article below describes the situation i can see happening but doesnt give an indication as to any fines that might occur?

https://www.taxation.co.uk/Articles/2017/02/28/336086/workings-statutory-residence-test

Thanks in advance for any help with this.

maths
Posts: 7426
Joined: Wed Aug 06, 2008 3:25 pm

Re: Self Assessment - Non-resident but may become resident.

Postby maths » Thu Aug 09, 2018 2:44 pm

If you are that worried, despite having filed a P85, complete a tax return for tax year 17/18 which presumably will give rise to a tax charge for the period Jan to Apr 2018. Pay this on or before 31.1.19.

If it transpires that you do qualify for split year treatment for 17/18 (as originally thought) then file an amended tax return for 17/18 (within 12 months of 31.1.19).

bd6759
Posts: 2857
Joined: Sat Feb 01, 2014 3:26 pm

Re: Self Assessment - Non-resident but may become resident.

Postby bd6759 » Thu Aug 09, 2018 4:17 pm

Or you could wait until Christmas when you will know the correct position.

Although you have an obligation to notify by 5 October 2018, the penalty for failing to notify is based on the tax that is unpaid on 31 January 2o19. As long as the tax is paid by that date there can be no penalty.

Hard_rock_geo
Posts: 2
Joined: Thu Aug 09, 2018 12:06 pm

Re: Self Assessment - Non-resident but may become resident.

Postby Hard_rock_geo » Thu Aug 09, 2018 5:26 pm

Or you could wait until Christmas when you will know the correct position.

Although you have an obligation to notify by 5 October 2018, the penalty for failing to notify is based on the tax that is unpaid on 31 January 2o19. As long as the tax is paid by that date there can be no penalty.
Thank you very much for you reply. I didn't know (or even think about) filing an amended tax return and you've definitely put my mind as ease knowing there shouldn't be a penalty for not notifying as long as I submit and pay any tax owed by 31/01/19.


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