Third automatic overseas test

hi. I started a new job with a UK employer on 23/05/2023. I previously was employed and living with my parents, but this employment ended in March. my P45 date was April 5th. Although it's a UK contract, and I'm on UK PAYE payroll, I am actually based in Portugal as of 23/05/23 - working in our subcontractor's office. My new job is to manage the subcontractor. I am now living in a company-provided apartment in Portugal. In November, I'm due to move to Israel until around June 2024 to another subcontractor's office, as a new project is kicking off. I am looking for help to confirm I am thinking correctly about my tax status. From my understanding, I would be eligible to claim non-resident tax status for the 23-24 tax year under the third automatic overseas test. Through this, I would be able to get an NT tax code once I update HMRC. I see there is a form online for my accountant to ask for a tax code correction. But I am unsure if need to file form P85 online first before I asked my accountant to query the tax code (or, if, once I send off the P85, would the tax code be updated automatically?). Can someone help me understand if I am correct that I would be able to get an NT tax code, and if so, that I need to file the form P85 first before I query the tax code, as I've already left the UK? In addition to the above, the third automatic test says You’ll be non-UK resident for the tax year if you work full-time overseas over the tax year and: (which I do - the job is mon-fri in Portugal, 39 hours a week) you spend fewer than 91 days in the UK in the tax year (I already spent around 46 days in the UK in the tax year prior to starting this job, and I have a further 35 days planned at the moment, although no flights booked yet (flights are provided by the company) - this takes me to around 81 days total) the number of days on which you work for more than 3 hours in the UK is less than 31 (I have 7 days of the 35 days in the UK where I plan to work from home, my first day of the new job was spent in Portugal.) there is no significant break from your overseas work (the most I have planned is 10 days of annual leave, which I am planning to spend visiting friends in the US.) When calculating the days in the UK, I am also unsure how it works. I have been in the UK for 2 days so far since starting the new job, but the flight to the UK from Portugal landed at 23:45 on a Thursday. By the time they got us off the plane, and to passport control, it was actually 00:10 on Friday morning when I had my passport scanned at the UK border by border force (technically in the UK). Do the 15 mins I spent airside on Thursday mean the whole of Thursday counts as one day in the UK, or does it not count since I hadn't actually crossed the UK border yet until Friday? i.e. if someone looked up my travel history from the border force, they would see I officially entered the UK/crossed the border at 00:10 Friday. Or does the thursday count as a day since the plane physically hit ground at 23:45?

Hi Jonathan,
Yes, you will need to submit form P85 in order to get the NT code issued to you.
For days in the UK, the transit days dont count so even though you arrived at 11:45 this was in transit.
Please see:
RDRM11730 - Residence: The SRT: Days spent in the UK: Transit days
Thank you. 


 

thank you. I submitted my P85 last week and today I checked my account and saw that it is now completed (no letters on my online tax account though - assuming I'll be getting physical mail instead?) at the same time, the day before the P85 was completed, the first payroll has been run at my new job and my tax code was updated to an emergency tax code. am I correct in saying that since the P85 was completed by HMRC, after the first payroll was run by my new company, there will be a lag in my tax code being updated? with the emergency tax code, do I need to call HMRC to sort this, or will it sort itself (possibly to NT tax code?) by the time the next payroll is run(1 months time)?

Hi Jonathan

Yes your code would have been updated to late for payrol to use. it will be used the next time you are paid.

Thank you

thanks. i rang HMRC to ask about this and they said I've just been given a normal tax code, not the NT tax code, as apparently I need proof of double taxation for the NT tax code. but my understanding from the legislation is passing the third auto overseas test makes you a non-resident regardless of double taxation status. is there any chance you know where I can find something in the legislation that says that NT tax code is applicable for non-residents, not just people being taxed twice?

Hi Jonathan,

HMRC won't know your residence status so you need to apply for relief and that will be with from P85 or a double taxation claim. both forms are on our website.

Thank you.