Posted by Nick Day on 27 Mar 2015

Death of the UK Tax Return for Expats?

The Chancellor may have indicated recently that “the death of the UK Tax Return” is likely over the coming years but as far as “Expats” are concerned, it seems inconceivable that they will not need to continue filing their annual UK Tax Return.

For example, HM Revenue & Customs have not yet come up with their own online version of the Tax Return that enables the supplementary “Residence, Remittance” pages (that expats need to attach to their Returns) to be filed online.

Expats (broadly those that are non-resident or those that are non-domiciled and potentially taxable on the remittance basis in the UK) will be keen to claim the correct status and the following reliefs:

Overseas Work Days Relief (OWR)

If you are a non-domiciled expat and move to the UK after 5 April 2013 (when new rules were brought in), you could be taxed on employment earnings relating to non-UK business travel only if you remit these earnings to the UK. This applies for the tax year of your arrival in the UK and the following two tax years.

Temporary Work Place (TWP) Relief

If you are assigned to the UK as an expat by your overseas employer for a temporary period of up to two years, your UK housing and subsistence costs should be a tax deductible expense, whether or not these are paid by your employer or by you personally.

International Travel Costs on Coming to the UK 

For non-domiciled expat individuals it should be possible to claim these costs as tax-free.

Relocation Costs on Moving to the UK

The UK allows up to £8,000 of certain employer reimbursed costs to be paid tax-free, in addition to the initial travel costs mentioned directly above.

Home Leave Travel Costs 

If you are non-domiciled expat and on assignment to the UK for the first time, the reimbursement by your employer of travel costs to visit your home country will be tax-free for the first five years.

International Tax Treaty Relief 

The UK has double taxation treaties with most countries, which can provide you as an expat with exemptions or relief for foreign taxes paid.

Remitting Pre-UK “Capital” on a Tax-Free Basis 

If you are a non-domiciled expat and planning to file UK tax returns on the remittance basis to avoid paying tax on non-UK income and gains while resident here, it should be possible to “ring-fence” earnings/income/gains from prior to becoming UK tax resident, enabling you to bring this “pre-UK” money to the UK on a tax-free basis.

Tax Relief for Pension Contributions 

Whether you pay in to a registered UK pension plan or a recognised overseas pension plan wile working in the UK, it should be possible to obtain UK tax relief for your contributions and avoid tax on your employers’ contributions.

The UK tax and social security rules are hugely complex and this article is for broad guidance purposes only, and is no substitute for a proper review by a qualified professional based on your individual circumstances.

Please see our page for more detailed information on expatriates and non-doms and also our detailed summary of the UK tax residence/domicile rules.

If you would like any advice regarding your UK tax return or would simply like to discuss other ways in which we could help you or your business, please contact us on 01962 856 990 or email customerservice@taxinnovations.com.