Maximising UK Tax Rebates For Foreign Workers

The UK Tax Year runs from 6th April – 5th April annually.

PAYE stands for Pay As You Earn. PAYE is a system to collect tax from employees as they earn their wages/salary so they do not have to file a tax return themselves.

As a general rule you'll be due a refund in the following circumstances:

• You commence work part way through a tax year
• You cease working part way through a tax year
• You have a break in employment during a tax year
• You incur expenses which are allowable against your employment income
• Your Coding Notice was incorrect
• You were on an emergency tax code

Tax is circumstance specific. Taxback.com's account managers are happy to provide you with a free, no obligation estimate of any refund you may be due.

Just because you work as an employee under PAYE does not always mean that you do not have to file a return. This depends on whether you have other sources of income which are not subject to PAYE. For further details please see the FAQs on Self Assessment which outline when a tax return is required.

1. HMRC sends your employer a Coding Notice which tells your employer how much to tax you.
2. Your employer deducts the tax and pays it to HMRC. The amount deducted is shown on your payslip.

A Coding Notice (CN) is a document issued by HMRC each tax year which advises the employer how much tax to deduct at each payroll date.

The CN calculation starts with the Personal Allowance which is the amount a taxpayer can earn free of UK tax. The Personal Allowance is then adjusted to reflect tax deductible items and taxable income.

So, for example, if the employee pays allowable professional subscriptions annually and HMRC has been advised of this, it will adjust the personal allowance accordingly to ensure that relief for the subscriptions is given at source.

On the other hand, if HMRC has been informed that the employee has taxable income not subject to tax at source, it will estimate the amount of income the employee will receive in the tax year and adjust the personal allowance down to ensure that the tax due is collected at source.

Once the adjustments have been made, the CN is issued to employers. It is important to note that CNs are estimates. Employees also receive copies of the CN and should always review their CN to ensure that it is correct.

Finally, any corrections required to CN's tend to be “coded out” (i.e. adjusted) in the following year's CN

Firstly you need to acquire a NIN (National Insurance Number). This is the unique tracker HMRC will use to keep tracker of your PAYE and National Insurance Contributions (NIC).

If you're British then you'll get your NIN automatically when you turn 16. If you come to the UK to work then you'll need to arrange a NIN, please contact the relevant authorities as soon as possible.

An emergency tax code is a code that your employer or pension provider uses on a temporary basis until HMRC has enough information about your income to enable HMRC to send them (and you) your correct code. It normally makes sure that you get the basic Personal Allowance (and therefore some tax-free pay) but doesn't take into account any other allowances or reliefs you may be entitled to. Your employer or pension provider will normally keep using it until HMRC tells them what your correct tax code should be.

The emergency tax code is set each year and is a number followed by the letter L. The number is the basic Personal Allowance (£9,440 for the tax year 2013-14) divided by 10. The emergency code for 2013-14 is therefore 944L.

Yes, but the rules are complex and the class of expenses is very narrow. The key is that the expenses must be "wholly, exclusively, and necessarily" incurred for the employment. Expenses which may be claimed include the following:

• Temporary workplace – travel, accommodation, subsistence;
• Professional subscriptions to recognised bodies i.e British Medical Council, Institute of Engineering etc
• Tools which you are required to provide for your employment (e.g a carpenter who must provide his own hand tools);
• Uniforms – cost and maintenance;
• Business travel – where employee must provide his own transport (note that if you use your own car then relief is given on the number of miles you travel – you should keep a record).

Your taxback.com account manager will advise you on what expenses you can claim.

You should be aware of the following:

• P46 employee no P45: Issued to employees by employer when they start work and they have no P45 from a former employment;
• P45: Issued to an employee by the employer when the employee leaves that employment.
• P60: Issued to an employee by the employer at the end of a tax year. It is a summary of pay, tax deducted and National Insurance deducted.
• P11D: Issued to the employee by the employer at the end of the tax year. It reports all Benefits in Kind the employee has received during the tax year.
• P85: Can be found online. Completed by the taxpayer to advise HMRC that they are leaving/have left the UK.

You should keep any documents you receive from your employer (P45, P60, P11D) as these are required to file your claim. If you are claiming for tax-deductible expenses then you should keep sufficient records to satisfy HMRC if it decides to carry out an audit on your file.

If you are leaving the country during a financial year and either won't be working again in that financial year or are leaving the UK permanently or indefinitely then yes you can claim a refund from HMRC upon departure and won't have to wait until the end of the tax year.

If you are leaving temporarily and will be working elsewhere in the tax year that you leave e.g. if you go to Australia on a working holiday visa, then you may have to wait until the end of the tax year to do a complete reconciliation of your position. It will all depend on your exact circumstances but we can check this out for you and let you know.

Real Time Information (RTI) for PAYE only changes the process of reporting PAYE, not the way it is calculated. RTI can only report the data HMRC already has, without checking the accuracy of this information, so you may be underpaid of even have your refund delivered to the wrong address.

We on the other hand will check all your paperwork before sending it to HMRC, make sure it adheres to tax law and that all the necessary information is included so that you get the maximum tax refund possible.