Breaking UK tax residence and what to do when HMRC are slow

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Hi everyone! This blog should get people chattering.  It tells you how one of my clients failed to break UK residence last minute because of lack of planning.  Even more interesting than that however are my tips and life hacks for managing HMRC. 

There are two topics covered in this feature, firstly the recent cases of UK taxpayers breaking UK tax residence.  The second topic covers how to deal with HMRC when they “go missing” and do not respond.  I have never encountered an unpleasant member of HMRC staff.  Ever.  That is not the issue.  I am referring to those long waits for replies from HMRC, or holding on the ‘phone to HMRC for 40, 50 minutes.  The tactics to employ when this happens.


The complete UK tax year rule

A UK national in London Aimee was delighted to be offered a 14-month secondment to Berlin, and she approached us for tax advice.  Her start date in Berlin was 1 May 2024, and the assignment ends in June/July 2025.  

Will she be UK non-resident and non-UK taxable?  No.

She is not outside the UK for a complete tax year.   One possible solution would be to bring forward the start date to 1 April 2024 (although it may be too late) then she could be outside the UK for one complete tax year.

Her colleague George was seconded to Saudi Arabia in December 2023.  His assignment will end in “summer 2025” but it is not fixed.

Will he be UK non-resident? Potentially Yes, if he repatriates after 5 April 2025, he would meet the complete tax year test.

There’s much more to it..

This above tax year is just one test but it is highly valuable.  It is the bedrock of everything.  There are many more tests which apply to deliver non-residence.  However, the message is that we cannot even leave the starting blocks if a client is not outside the UK for a complete tax year.


When HMRC are slow to reply

This blog is about for example the letter you (or I) sent to HMRC in January and twelve months later, we have had no reply and made no progress.

What’s the next step?

We have been using HMRC’s complaints team, and as a rule of thumb, we would not approach them unless at least six months have elapsed.  We had one case that was nine months’ old and we used this complaints channel.  They took about six weeks to reply but they resolved our issues.  It was immensely satisfying.

Escalating a problem

You might think this next idea is extreme, but after waiting twelve months, taxpayers are often ready to try any channel!  This is perhaps the route that I would pursue on your behalf.

On more than one occasion I have written to an MP and asked him/her to tackle the delays in this state body, HMRC.  An MP can clearly influence a case, and I do not use this option lightly.  I did have a meeting with our local Reading (Berks) MP and requested that he apply some pressure.  This definitely moves a case up the list.

When HMRC are slow to answer phone

You may have read or heard that there is currently an issue with HMRC answering the ‘phones.  A typical wait time is 30 – 45 minutes, and there is a shortage of resources.   This alternative below has been pleasing many of our clients.

You would log on to the HMRC website and search out HMRC webchat under the Ask HMRC online link.  When you are asked questions, you should type “I need to talk to a person” perhaps two or three times.  You should be put through to an HMRC agent.  It really works and can take place over 5-10 minutes.  If you are not confident with the issue involved, you would ask your adviser to use this website.