Non-residence, Tax and Money

So resently a friend working abroad mentioned about his tax situation. It sounded rather complicated so I decided to help to see if we can make more sense of it.

As usual, all the information is on the HMRC website, the trouble is to digest them all.. 

Non-resident & Not Ordinarily resident:

Non-resident: You'll be treated as non-resident from the day after you leave the UK if you can show:

• you left the UK to go abroad permanently or your absence and full-time work abroad lasts at least the whole tax year
• your visits to the UK are less than 183 days in a tax year and average less than 91 days a tax year over a maximum of four consecutive years

 Not ordinarily resident: You normally live outside the UK.

Forms: 

If you have left or are about to leave the UK you must tell HM Revenue & Customs (HMRC). If you're not required to fill in a tax return, you'll have to complete form P85 Leaving the UK - getting your tax right. If you're leaving the UK to work full-time abroad for a UK based employer for at least a complete tax year, you'll need to fill in a tax return as well as a form P85.

HMRC will use the information on the form to send you any tax refund you're owed and work out if you'll become non-resident. It's important you enclose parts 2 and 3 of form P45 if you have one as HMRC will not be able to make any tax refund due without them.

Income from overseas employment:

If you become non-resident, you won't pay UK tax on your income from working overseas, unless you work partly in the UK or if you are a Crown employee, a seafarer, a oil and gas worker, an entertainer and sports people or a student.

If you're not resident You won't pay tax on your overseas income even if you bring it into the UK. 

Tax on UK bank interest:

If you are non-resident, tax is usually still deducted before you get the interest. 

If you are also 'not ordinarily resident', you can get your interest without tax deducted by giving form R105 to your bank.

If tax has been deducted from interest, you might be able to claim a refund against UK tax allowances using form R43.

 

Tax-free allowances for non-residents:

If you're a European Economic Area citizen (including British), or a current or former Crown employee, you'll still get your tax-free allowances to reduce the amount of UK Income Tax due. 

Declaring cash when entering the UK:

Must declare any cash of 10,000 euros or more (or the equivalent in other currencies) to HM Revenue & Customs.

UKBA officers will only seize declared cash if they have reasonable grounds to suspect it is the proceeds of or is intended for use in illegal activities. Seized cash cannot be kept for more than 48 hours (not including public holidays and weekends) without a court order.