Tax reclaim for emigration to the US

[Fishol]

Myself and my partner are moving to the US around March/April 2004 to set up a business under E2 visa status.

I left my PAYE employment on 19th December to concentrate on the move but I have a £685 self assesment tax bill due to overpayment of Child Tax Credit in 02/03 which is due to be clawed back in 04/05 tax year.

I have three questions.

1. I have no intention to work before I go. What do I do with my P45?

2. How do I inform the Inland revenue of my departure? Is it a P85 form?

3. Should my tax credits following my resignation (December-March)cancel out my tax owed?

Thanks for any response

Steve

[andy@awtaxservices.c]

Steve,

1. Your P45, which should show your pay and tax for the period up to the end of your employment in December 2003, will need to be submitted to the Inland Revenue to support a claim for any tax overpaid in the year ending 5 April 2004 to be refunded to you.

2. You're absolutely right about the form P85. You'll need to complete one of these to notify the Inland Revenue that you are leaving the UK. This form includes a claim for repayment of any taxes overpaid.

If you're expecting to be absent from the UK and working full-time abroad for at least one complete tax year, then you should be regarded as Not Resident and Not Ordinarily Resident (and thus generally not taxable on your earned income - with certain exceptions) for UK income tax purposes. Any income of gains arising in the UK will, however, remain liable to UK taxation.

3. The level of any refund due, will depend upon the amount of taxes paid to the date you left employment and the accuracy of the tax code that was operated during that time. Without further details I cannot answer this question more fully.

I hope this is of assistance to you. I am very experienced in dealing with the various UK tax aspects of individuals leaving the UK including advising on the completion of many, many P85 forms, so if I can be of any further assistance, please contact me.

Andy@AWTaxServices.co.uk
www.awtaxservices.co.uk