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Moving abroad - what to do to notify HMRC

In January I will be moving to Japan and receiving conflicting advice about tax requirements.

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In January I will be moving to Japan to work for a Japanese registered company (it is not obliged to pay UK taxes). Once there I will be subject to Japanese tax. However, I am receiving conflicting advice about what I need to do to let HMRC know of this change before I leave. 

I am aware I need to provide a P85 form, but am unsure whether I must also do a self-assessment tax return (I have no unearned income in the Uk but will be paid in different currencies in the same tax year). I’m also unsure how to apply for a Nil Tax code so I am not put on emergency tax - is this something I do or my employer? 

I would appreciate any advice.

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By David Heaton
10th Dec 2019 11:12

How long will you be living in Japan, and where will your employer be? These are crucial questions.

If you are going to be away for a complete UK tax year and will not be UK tax resident for 2020-21, your Japanese income should not be taxable in the UK, as you should qualify for 'split-year' treatment - taxable in the UK up to the point you leave, then taxable in Japan for the rest of the UK year, with no obligation to report your Japanese income in the UK.

If you're coming back at some point in 2020-21, you don't get split-year treatment, so you'll need to complete a tax return and claim double tax relief against your Japanese tax.

Send in your P85 and tell HMRC about your plans.

And don't forget NIC - if you have a UK employer while in Japan, you will pay UK NIC rather than Japanese contributions, because we have a double contributions convention with Japan. If your employer is Japanese, you will pay Japanese social security contributions, not UK. You might want to pay voluntary Class 2 contributions in that case, to keep your UK state pension record intact. You can pay Class 2 even if you're employed in your overseas work.

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