Firstly, you should be aware that you can only reclaim overpaid taxes for incomplete fiscal years, that is those where you arrived in, or departed from, the UK part way through the year (April to March in the UK).
There are three important documents required to reclaim overpaid taxes, two of which you will receive from your employer’s payroll department and the third the declaration of departure (P85) to the Inland Revenue:
: at the end of each fiscal year, your employer is required to provide you with a P60, showing the amount of earnings and tax deducted for the year;
: when you end your employment with a company, whether voluntarily or due to redundancy, your employer will provide you with for P45, a statement of your earnings and tax paid from the start of the fiscal year until the end of your employment
: If you are leaving the UK permanently, you must notify the Inland Revenue, using form P85 (downloadable from the internet). They will advise you of whether you need to complete a tax return in order to proceed with your claim for a tax refund.
If you are not a UK citizen and you are leaving the UK after completing a work assignment here you should use the P85(s)
The P60 and P45 are important documents – look after them! If you lose the originals, you may not be able to obtain a replacement.
First, you will need to find out which Tax Office is responsible for your affairs. Your employer will be able to provide this information, or you can use the Inland Revenue’s tool HM Revenue and Customs website
to search using your postcode.
The Tax Office will usually accept your request for a refund in the form of a letter, with your P45 and P60 attached (you must send the original documents and keep the duplicates) and a completed P85 form, where appropriate. Given the importance of these documents, it is advisable to send them by Recorded Delivery.
With regard to the P85, if you received any taxable benefits from your employer (e.g. subsidized accommodation, heath insurance, help with school fees), you will also be asked to provide for P11D P11D
. This form will be provided to your by your employer at the end of the fiscal year and shows details of all of the taxable benefits that you received.
These documents enable the Tax Office to calculate the amount of UK Income Tax due and to ascertain whether you have paid too much tax.
As an example, let us suppose that you leave the UK at the end of the 2005 fiscal year, having worked for 9 out of the 12 months in London. During this time you have earned £30000 and your employer has deducted £5550 in taxes.
The tax due is calculated as follows:
|Total pay for the year:||30,000|
|Less tax free pay allowance:||4,895|
|Tax at 10% on the first £2020:||202|
|Tax at 22% on the next £23085:||5,078|
|TOTAL TAX DUE:||5,280|
|Tax paid already:||5,550|
|REFUND of overpaid tax due:||270|
In general, you can expect to wait 4-6 weeks for the Tax Office to process your claim.