P85 Form: Tax When Leaving the UK 2026 - Refunds & Residence

If you're leaving the UK to live or work abroad, you can usually claim a tax refund for the unused portion of your Personal Allowance in the UK tax year. The form is the P85, filed with HMRC after you leave (or as you leave). This guide covers when to file, what to attach, and what happens afterwards.

When you need a P85

You typically need a P85 if all of these apply:

• You're a UK tax resident at the time of leaving.
• You're leaving the UK to live or work abroad.
• You'll be out of the UK for at least one full UK tax year (6 April to 5 April).
• You haven't yet filed the relevant year's Self Assessment.

Going abroad for less than a year (e.g. a 6-month assignment) doesn't usually trigger P85. You stay UK-resident and tax accordingly.

When you do NOT need a P85

• You're going abroad for less than a full UK tax year.
• You've already filed Self Assessment for the year you're leaving (the SA captures everything).
• You're continuing to receive UK PAYE (e.g. you're seconded by a UK employer to a foreign branch but still paid in the UK).
• You're an employer seconding staff - that's the staff member's individual responsibility.

What the P85 does

The P85 tells HMRC:

1. The date you left the UK.
2. Your destination country.
3. Whether you intend to be UK-resident or non-UK-resident going forward.
4. Your last UK employer + final pay details.
5. Your foreign address for any correspondence.

HMRC then:

• Calculates your split-year tax position (which months in the year were UK-resident).
• Refunds any unused Personal Allowance for the months after you left.
• Updates your record to non-UK-resident going forward.
• Stops sending you the annual P800 / Self Assessment notification (unless you have ongoing UK income - rental, etc.).

Split-year treatment

Under the Statutory Residence Test (SRT), the UK tax year is normally 6 April to 5 April. But if you leave mid-year, split-year treatment divides the year into:

• UK part: from 6 April to your date of departure.
• Overseas part: from your departure to 5 April.

Tax during the UK part is calculated as if you were resident for the whole year, with full Personal Allowance applied. Tax during the overseas part typically only applies to UK-source income (rental, UK pension, UK dividends).

The key benefit of split-year: you get the full annual £12,570 Personal Allowance for income earned in the UK part of the year. If you leave mid-year having earned £20,000 by then, your taxable amount is £20,000 - £12,570 = £7,430.

Worked example: leaving in October

You earned £25,000 between 6 April and 30 September (6 months), then left on 1 October.

UK part: 6 April - 30 September
Earnings (PAYE):                 £25,000
Personal Allowance:              £12,570
Taxable:                         £12,430
Tax at 20%:                       £2,486
NI at 8% (above £12,570 threshold): £994
Total tax + NI:                   £3,480

Your March payslip (or P45) showed cumulative tax + NI of around £3,480. After P85 filing, HMRC may refund part of this if your effective rate was higher than 20% on a non-cumulative basis.

For most people leaving mid-year, the refund is modest (£200-£800) because cumulative PAYE already gave you most of the Personal Allowance benefit. The refund is larger if you were on a non-cumulative code (W1/M1/X) or if you had a salary-sacrifice setup that paused early.

What you need to file

• P85 form (online via PTA, or paper).
• P45 from your final UK employer (or final payslip showing YTD figures).
• NI number + UTR (if you have one).
• Bank details (UK account where the refund can land - easier than overseas).
• Foreign address for HMRC correspondence.
• Letter from new employer if you have one (helps HMRC understand the situation).

How to file

Route 1 - Online via Personal Tax Account

1. Sign in at gov.uk/personal-tax-account.
2. Go to "Tell HMRC you're leaving the UK" or similar.
3. Complete the online P85 (takes 15-30 minutes).
4. Upload supporting documents.
5. Submit.

Online P85 typically processed in 4-6 weeks.

Route 2 - Paper P85

1. Download from gov.uk/government/publications/income-tax-leaving-the-uk-getting-your-tax-right-p85.
2. Complete the form by hand or print-fill.
3. Attach P45 + supporting documents.
4. Post to: PAYE & Self Assessment, HMRC, BX9 1AS, United Kingdom.

Paper P85 typically processed in 8-12 weeks.

What happens after P85

• HMRC issues a refund (if applicable) by bank transfer to your UK account, or postal cheque to your foreign address (slower).
• HMRC updates your tax record to "non-UK-resident".
• Your tax code is closed for the leaving year (or set to NT - "no tax" - for any residual UK income).
• Future UK income (e.g. UK rental income) you must report via Self Assessment as a non-resident.
• Foreign income you earn while abroad is generally NOT taxable in the UK (subject to your destination country's tax treaty with the UK).

Continuing UK income - what to do

Common scenarios where you still have UK income after leaving:

Scenario 1 - UK rental income

You rent out your UK home. Income is taxable in the UK as a non-resident landlord.

• Register for the Non-Resident Landlords (NRL) scheme via NRL1 form.
• Either get gross rent (with quarterly tax payments) or accept 20% deduction at source.
• File Self Assessment annually with SA105 (UK property) supplement.

Scenario 2 - UK pension

UK pension paid to you abroad is generally taxable in the UK, unless your destination country's tax treaty allows you to claim it as foreign-only income. Check your treaty status.

Scenario 3 - UK dividends

UK dividends paid to a non-resident are typically taxed at the UK basic rate unless the treaty provides relief. File Self Assessment (or use treaty relief via your destination country).

Scenario 4 - UK savings interest

UK savings interest paid to a non-resident is generally gross (no UK tax deducted). Foreign-resident interest is usually taxable in your destination country only.

Tax treaty considerations

The UK has tax treaties with most major countries. The treaty determines:

• Which country has primary taxation rights on each income type.
• Whether you can claim foreign-tax credits.
• The rate of UK tax on cross-border income.

Common treaty patterns:

• Employment income is taxed where you physically work.
• Pension income is sometimes taxed only in the country where you live.
• Investment income (dividends, interest) is often subject to a withholding rate (typically 15%) on cross-border payments.

For substantial cross-border tax planning, consult an international tax adviser BEFORE leaving.

Returning to the UK

If you return to the UK within a UK tax year and become resident again, you may get second split-year treatment. The UK part of the year (after return) sees you taxable as resident again.

You typically don't need a P85 reverse - your new UK employer's PAYE setup tells HMRC you're back.

Common P85 issues

1. Forgot to file P85 before leaving - you can still file from abroad. HMRC accepts late filings; refund processes normally.
2. No UK bank account anymore - refund issued by postal cheque to your foreign address. Can take 6-10 weeks.
3. Your destination country claims you for the same tax year - provide your departure date evidence; the treaty + split-year treatment should resolve.
4. Multiple departures and returns - a complex sequence within a tax year may need Self Assessment rather than P85 for accurate reconciliation.

When to talk to an international tax adviser

For routine departures (UK PAYE earner moving abroad for a job), the P85 + your new country's tax filing covers it. An international tax adviser earns their fee when:

• You have substantial UK assets (property, investment portfolio, business interests) you're leaving behind.
• You're moving to a country with an unusual tax structure (Hong Kong, Singapore, UAE, Dubai - zero or near-zero income tax).
• You have UK-domiciled status issues (different from UK-resident).
• You're considering expatriation for tax reasons (legal but complex).
• You expect to return to the UK within 5 years (special rules apply).

Disclaimer

PayslipIQ provides automated educational guidance based on the figures you supply. It is not regulated tax advice. International tax depends on the destination country's rules + the UK tax treaty + your specific circumstances. For substantial cross-border tax decisions, consult a CTA-qualified or US/cross-border-licensed tax adviser before leaving the UK.