Working Gap Year Tax (UK)?

Question

I'm planning a working gap year in Australia, starting in November and need to know what I need to do regarding UK tax.

Do I need to tell them I'm going away?

Will I need to pay UK tax on my overseas earnings?

I'd like to stay in Oz for the whole year which means I'll probably be away for a year and a day or something but I may end up coming back earlier.

Thanks in advance.

Answer 1

You need to download form P85 from www.hmrc.gov.uk. You may not be due a refund - it depends on how long you are going to be out of the UK. If you are out of the Uk for a complete tax year (6 April to 5 April), you will be regared as not resident and your Oz earnings will not be liable to UK tax. If you are not absent for that length of time, your Oz earnings will be liable to UK tax, but you will get credit for any Oz tax paid.

Answer 2

When you go to Australia you will find that your Passport gets stamped on entry and again on leaving so you can prove how long you are away.  You wont pay UK tax on your Australian earnings. You will pay Australian tax though.

Answer 3

As you are leaving the UK part way through the tax year you will be due a tax refund.

In order to get this tax refund, you should tell the Inland Revenue you are leaving by completing a form P85. Send this together with a P91, and P45/P60/Statement of Earnings to your local tax office.

Alternatively use an agency, they do charge however around 10%, one such agency is: http://www.taxfix.co.uk

If you work and pay tax in Australia you will not have to pay tax in the UK, as they have a double taxation agreement.  

Answer 4

You do not have to inform them in advance, but get your passport marked and keep your hotel /accomodation bills to prove you were out of the country, but talk to the pensions people, as you will need to pay them, contributions,  to maintain  your eligibility, it is better to do so, but it is not essential, you also need to check out the income tax, if you are taxed at source over their, and an attempt is made to tax you here as well, then you can claim back the tax paid in  Australia, because you can elect to pay in the country of your choice, if they know beforehand, but if you are out of here for a year  or more, you have no liabilities, for UK taxes,under that, you will face a bill, so elect for Australian taxes before you go if the taxman says otherwise, you will not face  a bill...