Moving abroad can involve more than packing your bags and booking a flight. If you have been living and working in the UK and are now leaving the country, you may also need to sort out your UK tax position.

One form that often comes up in this situation is Form P85.

Form P85 is used to tell HMRC that you are leaving the UK and, where appropriate, to claim a refund if you have paid too much Income Tax through PAYE.

However, not everyone leaving the UK needs to complete a P85. Your circumstances, including whether you need to file a Self Assessment tax return, are important.

What Is Form P85?

Form P85 is an HMRC form for people who are leaving the UK.

If you have been employed in the UK and paid Income Tax through PAYE, you may have paid more tax than you actually owe for the tax year. In certain circumstances, you can use P85 to ask HMRC to check your tax position and issue any repayment that may be due.

It can also be relevant if you are moving abroad but continuing to work for a UK employer.

Simply completing the form does not guarantee a refund. HMRC will look at your circumstances and calculate whether any tax is actually due back.

Who May Need to Complete a P85?

P85 may be relevant if you:

• Have been living and working in the UK
• Are leaving the UK to live or work abroad
• Have stopped working for your UK employer
• Have paid UK Income Tax through PAYE
• Think you may have overpaid tax
• Are going abroad to work for a UK employer for at least one complete tax year

Your circumstances matter, so leaving the UK does not automatically mean that you need to submit a P85.

When Should You Submit Form P85?

If you have already left the UK, you can usually make an eligible P85 claim online.

If you have not yet left the UK, HMRC says you need to print and post the P85 rather than submitting it online.

Before completing the form, it is worth checking whether you have any Self Assessment filing obligations for the year in which you leave.

What Information Do You Need?

You will need some basic information about your UK employment and your move abroad.

This may include:

• Your National Insurance number
• Your date of birth and personal details
• Your date of leaving the UK
• Your new address
• Details of your UK employment
• Information about your future employment
• Details of any UK property or income
• Your P45, if you have received one

Having your paperwork ready can make the process much easier.

Do You Need a P45 for P85?

Your P45 is useful when completing a P85.

A P45 contains details about your employment and the pay and tax recorded by your employer when you leave your job.

If you have a P45, HMRC asks for the relevant information from it. For a postal P85 claim, HMRC also says to include your P45 if you have one.

If you do not have a P45, this does not necessarily mean that you cannot deal with your tax position. Your circumstances will determine what you need to do.

Can You Get a Tax Refund Through P85?

You may be able to get a tax refund if you have paid more Income Tax than you actually owe.

For example, imagine you worked in the UK for part of the tax year and then moved abroad. Your employer may have deducted PAYE tax from your salary throughout your employment.

Depending on your circumstances, you may have paid more tax than necessary.

HMRC can review your position and determine whether a repayment is due.

But it is important not to think of P85 as an automatic “tax refund form”. The result depends on your individual tax position.

P85 and Self Assessment

This is where things can get a little confusing.

If you are required to complete a Self Assessment tax return for the tax year in which you leave the UK, you would normally deal with your departure and residence position through your tax return rather than using P85 for that purpose.

This can include completing the relevant sections of the Self Assessment return, such as SA109, where applicable.

There are some exceptions. For example, HMRC guidance covers certain people who continue working for a UK employer while living abroad and may need an NT tax code.

If you are unsure whether P85 or Self Assessment applies to you, it is worth checking your circumstances before submitting anything to HMRC.

Does P85 Make You Non-UK Resident?

No.

Completing a P85 does not automatically make you non-UK resident for tax purposes.

UK tax residence is determined under the Statutory Residence Test. Things such as the number of days you spend in the UK, your work, home and other connections can be relevant.

In some situations, split-year treatment may apply when someone leaves the UK during a tax year. However, this depends on meeting specific conditions.

So, moving abroad and becoming non-UK resident are not necessarily the same thing.

What If You Continue Working for a UK Company?

Some people leave the UK but continue working for a UK employer.

This can make the tax position more complicated.

HMRC has specific rules for employees who work abroad for a UK employer, including circumstances where an NT tax code may be appropriate.

If you are in this situation, you should check the rules carefully rather than assuming that leaving the UK means UK PAYE automatically stops.

Common P85 Mistakes

1. Assuming everyone leaving the UK needs P85

They don’t. Your circumstances and Self Assessment position need to be considered first.

2. Expecting an automatic refund

Submitting P85 does not guarantee that HMRC will refund your tax.

3. Ignoring Self Assessment

If you need to file a Self Assessment return for the year you leave the UK, you may need to report your circumstances through the tax return.

4. Assuming you automatically become non-resident

Leaving the UK does not, by itself, determine your tax residence.

5. Forgetting about UK income

If you continue to receive UK income after moving abroad, it may still have UK tax implications.

Frequently Asked Questions (FAQs)

1. Is P85 mandatory when leaving the UK?

No. Whether you need to complete P85 depends on your circumstances. If you are required to file a Self Assessment tax return for the year you leave, you would normally deal with your tax position through Self Assessment instead.

2. Can I submit P85 online?

Yes, eligible claims can be made online after leaving the UK. If you have not yet left the UK, HMRC says you need to print and post the form.

3. Can I claim a tax refund after leaving the UK?

You may be able to claim a repayment if you have paid more UK Income Tax than you owe. HMRC will determine whether a repayment is due.

4. What happens if I don’t have a P45?

Not having a P45 does not automatically prevent you from dealing with your tax position. What you need to provide will depend on your circumstances.

5. Does P85 make me non-resident?

No. Your UK tax residence is determined under the Statutory Residence Test.

Final Thoughts

Form P85 can be useful if you are leaving the UK and need HMRC to review your PAYE tax position.

But there is no one-size-fits-all answer. Before submitting the form, check whether you also have Self Assessment obligations and whether your UK residence position needs to be considered.

A little preparation before leaving the UK can make the tax side of the move much easier.

SAS KPO Services supports UK accounting firms with a range of accounting and tax services, including personal tax returns, bookkeeping, VAT, payroll and HMRC-related support.

Disclaimer: This article is for general information only and does not constitute tax or legal advice. UK tax rules can depend on individual circumstances and may change. Always check the latest HMRC guidance or speak to a qualified tax professional for advice specific to your situation.