French Citizen, UK based airline employer, PAYE

French Citizen, UK based airline employer, PAYE

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Hi All, 

I would be grateful if you could help me on this.

I have been approached by a client who is a French national, used to live in UK, now have moved back to France. He works with an airline with registered office in UK. His employer deducts UK tax and NI from his salaries.

He told me that the same is happening with his colleagues who are Spanish, but they get the whole tax paid back from HMRC. And he wanted my help in getting back his taxes.

Please could you advise what could be done in such scenarios and how the Spanish employees are getting their UK tax back.

thanks

MKRAJA

Replies (3)

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By frustratedwithhmrc
23rd Nov 2011 19:48

Fairly straight-forward really

When your French client returned to France, he should have provided HMRC with a P85 showing the same. HMRC would then have reviewed his circumstances in light of Shepherd v HMRC (see following link) and if his circumstances are sufficiently different, such that your client is non-resident and not earning UK income, then an "NT" tax code will be issued.

http://www.hmrc.gov.uk/cnr/p85.pdf

http://www.taxationweb.co.uk/tax-articles/general/residence-failure-to-establish-cessation-of-residence-and-ordinary-residence-in-the-uk.html

Once the "NT" is issued it is a relatively simple matter to request a self assessment tax return to reclaim any tax paid overpaid to HMRC from the date of departure provided for by extra-statutory concession A11 (see page 22 of the attached document). 

http://www.hmrc.gov.uk/specialist/esc.pdf

After HMRC have acknowledged your client as being genuinely non-UK tax resident, a claim for the recovery of overpaid NIC's may also be made through HMRC's contributions office.

As part of all of this, HMRC may require a Certificate of Tax Residence from the French fiscal authorities.

Given that HMRC won the case against Mr. Shepherd it is reasonable for an airline to behave the way they have unless in receipt of other instructions (such as an "NT" PAYE code from HMRC) to say otherwise.

Under the terms of the UK / FRANCE Tax Information Exchange Agreement, HMRC may inform the French fiscal authorities that your client is in receipt of an income from a foreign employer based in the UK. Given this it is essential that your client ensures that all UK income is represented on his French tax return as well.

 

 

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By dbowleracca
25th Nov 2011 22:15

Brilliant answer frustratedwithhmrc
That's one of the most helpful answers I have seen on here. Not entirely relevant to me but a well thought out and useful response that should help the OP enormously.

Thanks for posting this.

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By MKRAJA
26th Nov 2011 12:04

Thank you very much

Thanks for you very much for detailed answer which is really very helpful and has directed me towards the right course of action. Really appreciated.

 

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