New arrivals and failure to notify UK tax liability

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Until 1 June 2010, foreign nationals or returning UK nationals were required to file a form (P86) informing HMRC of their arrival in the UK and, among other things, their intention with regard to the duration of their stay here.

This is no longer a requirement so new arrivals to the UK may remain unknown to HMRC who may have no knowledge of them or their liability to UK taxation. Consequently, HMRC will not issue a tax return to individuals in such a position.

However, non–receipt of a tax return form does not remove the requirement to file one.  Indeed, it should be noted that taxpayers are required to give notice to HMRC of their liability to income tax by 5 October following the end of the tax year and failure to do so will result in penalties being sought by HMRC.

The maximum penalty is the amount of tax due and unpaid at 31 January following the tax year to which the liability relates.  This means that even if notification is made after the six-month time limit (after 6 October) the penalty can be eliminated if the taxpayer pays the full amount of the tax due on or before 31 January.

If you have employees who arrived in the UK between 6 April 2010 and 5 April 2011 but have not informed HMRC of their presence here, they should ensure that any tax they owe for their year of arrival is paid over as soon as possible.

If you require any assistance or have any questions, please contact John Mooney on +44 (0) 20 7036 8391 or Bina Gayadien on +44 (0) 20 7036 8383.