Tax Doesn’t Have to be Taxing: 2015/16 Tax Returns for UK Expats

Tax doesn't have to be taxing. The author highlights five common pitfalls that you as an expat can avoid when starting your tax returns.

By Martin Rimmer, Senior Tax Manager, The Fry Group


The fifth of April saw the end of another tax year in the UK. This fact may have gone unnoticed by many expats, whose attention may have been focused on matters closer to ‘home’.


In recent months HM Revenue & Customs (HMRC) in the UK has been working hard populating their database with the names of all individuals required to complete a tax return for the year ended 5 April 2016 (2015/16). They will shortly be sending out their first reminder letters to all those individuals currently registered under self-assessment.


It is important to remember that under the self-assessment regime, it is the individual’s responsibility to inform HMRC of their obligation to complete a tax return. Failure to do so may be an oversight, be due to confusion over the complicated tax framework in the UK or be simple avoidance. Whatever the reason, the time to act is now.


Expats who didn’t need to file tax returns previously, should check whether that is still the case today. Being on the front foot with such matters always provides the best outcome, especially when it comes to paying taxes.


Here are some common pitfalls to watch out for when starting your tax returns as an expat:


  • On-line returns: Surprisingly the new on-line tax return system does not allow you to identify as a non-resident. Expats should make sure they are claiming non-residency.
  • Defining residency: The amount of time you can spend in the UK each year while maintaining non-resident status can vary from 15 days to 182 days per year, depending on circumstances.
  • Working in the UK: If you return to the UK for business the type of activity you are undertaking can affect residency — training may not be considered work, managing a cross-border team might qualify. Some companies notify HMRC as a matter of policy and it’s worth knowing whether that is the case with you.
  • Tax on rental properties: Expats that rent out their UK property often aren’t aware that rental accounts need to be prepared on the ‘accruals’ basis, rather than just by adding up income and subtracting expenses incurring in the tax year itself.
  • Incorrectly filled out pages: Residence Pages, Personal Allowance not adequately claimed and dividend income — which can often be tax free — remain taxed.


We often see expats who are worried because they’ve ignored their tax affairs, sometimes for years. Commonly the same mistakes are made on tax returns from year to year. Chronic mistakes in your filings can have expensive consequences, such as missed opportunities in tax planning or it can be a red flag to HMRC that your returns are not fully compliant.


If this rings true to you, then the main thing is not to bury your head in the sand. These things can be dealt with and it is not as painful as you might imagine.


It’s not too late to put your tax affairs right, but it will take some work, ideally with professional help.


Whatever your past experience of UK tax returns, it is worth reviewing your tax status regularly and reviewing your tax returns with an adviser can be a good way to consider your tax planning in general. This can provide piece of mind when considering a return to the UK in the future.