What are the most common migrant tax problems?
On this page we list a number of commonplace tax issues that migrants may face on coming to the UK, including how to get a National Insurance number, understanding a payslip and what to do if you think you have paid too much tax.
How do I get a National Insurance number?
For information on how to obtain a National Insurance number (NINO), read the guidance at 'how do I get a National Insurance Number?'.
I have lost or forgotten my National Insurance number, what do I do?
For information on what to do and who to contact if you lose or forget your NINO, read the guidance at 'how do I get a National Insurance number?'.
I cannot get through to HMRC by phone
It is not always that easy to get through to HMRC. You can find some hints and tips on calling them, including information for those with language difficulties, in our news item 'HMRC helplines – dealing with the automated system'.
You should be very wary of calling any number that is not a 0300 number in an effort to get through to HMRC. This could end up costing you a lot of money, as we explain in our news item 'Calling HMRC – do you really need to use a paid recording service?'.
HMRC are increasingly communicating with taxpayers via online channels. You can find out more about the digital services they offer in our LITRG guidance.
I think my employer is not paying me enough
If you are an employee or worker, the law gives you the right to a minimum wage. For more information on the National Minimum Wage and the National Living Wage, read the guidance in the section 'what is the National Minimum Wage?'.
My employer pays me in cash and does not give me a payslip
Your employer is allowed to pay you in cash, after they have made the relevant deductions, but they must always give you a payslip. We suggest you read the sections 'what if I am paid in cash?' and 'understanding your payslip'.
You should ask your employer to provide you with a payslip each payday.
Help me understand my payslip
If you need help understanding your payslip go to 'understanding your payslip', where there is an annotated example of a payslip. Although there is no standard format, this should help you understand the key parts of your payslip.
I think I have paid too much tax
We provide information on how to reclaim overpaid tax in a variety of situations at 'how do I claim tax back?'.
I have lost the pay and tax documents I need to claim my tax back
HMRC may ask you to provide various documents, for example a P60 or a P45, if you want to claim a refund of tax.
If you are an employee, at the end of the tax year, you should get a form P60, which is a record of how much you have been paid and the tax that has been deducted. Your employer must, by law, give you a form P60 no later than 31 May if you were working for them on 5 April.
When you leave a job, your employer must give you a form called a P45. It is a record of your pay and the tax that has been deducted in the tax year so far.
If you do not receive these documents, you should request them from your employer and keep them safe.
If you have been given these documents but you have lost them, then you should do the following:
- For a P60, you should first approach your employer to ask them if they can provide you with a copy. Employers are obliged to keep records of pay for several years and so they should be able to provide you with a copy of your P60. The P60 will be clearly marked as ‘duplicate’.
- For a P45, your employer will not be able to provide you with a duplicate but should be able to provide you with a ‘statement of earnings’ on company-headed paper. This acts as a replacement for a P45.
Alternatively, you can contact HMRC. HMRC will be able to provide you with alternative official information regarding the amount of pay that you received and tax that you paid, based on the amounts which the employer has reported to them. You can find contact details for HMRC on the GOV.UK website.
What is a tax refund company?
Migrants should beware of various companies (often advertising online) which offer to claim back overpaid tax for taxpayers. These are often called ‘tax refund companies’. Many tax refund companies charge high fees for a service that you can easily do for yourself.
If you need help, but cannot afford to pay for a tax adviser, it is likely that HM Revenue & Customs (HMRC) will be able to assist. Alternatively, there are tax charities that may be able to help you depending on your circumstances. Tax charities include TaxAid and Tax Help for Older People. You may also find our getting help section useful.
How do I cash my tax refund cheque if I have left the UK?
HMRC will only issue refunds by bank transfer to a UK bank account or by cheque. They will not make bank transfers direct to an overseas bank account.
If it is not possible to arrange for HMRC to issue the refund to your UK bank account (for you to transfer the funds overseas either by international transfer or using your UK ATM card abroad – each of which is likely to incur a charge) then you could either:
- Arrange for HMRC to issue the refund to a nominee in the UK (either by bank transfer or cheque) whom you trust to transfer the amount to your account overseas, or
- Ask HMRC to send the cheque in your name to your overseas address, so you can cash the cheque in an overseas bank – it can take weeks though for an overseas bank to process a UK cheque and the fees will be hefty (if they even offer the service – you should check beforehand). There may also be delays in receiving the cheque as there is no guarantee HMRC will use the correct postage for an overseas address.
I owe money to HMRC
There are a number of reasons why you may end up owing money to HMRC. For example, if you are self-employed and do not save up for your tax bill at the end of the year, or if you are employed and have two jobs – each of which is giving you the tax-free personal allowance, or you receive allowances through PAYE that you are not entitled to.
You should act quickly if you receive a letter from HMRC about a tax debt. Please do not ignore the matter – things might not be as bad as you think, particularly if you speak to them before a tax bill becomes overdue. You may be able to arrange to pay in instalments, for example.
If you do nothing at all and return home then you could face legal action. This means that if you ever return to the UK, you may face problems and have a large bill to pay. HMRC can also pursue tax debts in your home country.
For more information and guidance on what to do, visit our page ‘what if I cannot pay my tax bill?’.
What should I do if HMRC keep sending me tax returns to complete, even after I have left the UK?
It is always sensible to advise HMRC about your departure from the UK, so they can determine if there is anything formal you need to do in relation to your departure. Furthermore, if you complete a tax return you should put your date of departure in the tax return so HMRC can close down your Self Assessment record and stop sending you tax returns to complete.
If you did not do this, and HMRC have continued to issue you tax returns to complete, you can phone HMRC and ask for the tax returns to be withdrawn. If they agree, you will no longer need to file a tax return and any penalties for missing the filing deadline will be cancelled.
You can find contact details for HMRC on the GOV.UK website.
How do I make an appeal against a decision?
If you disagree with HMRC you may be able to make an appeal. For more information, go to the tax appeals section of this website.
How do I make a complaint against HMRC?
If you are not happy with the way HMRC have treated you or dealt with your tax, you are able to make a complaint. For more information, read the how to complain section of this website.
I have two jobs. How do I split my personal allowance between them?
If you have more than one job but your income from both is going to be less than your personal allowance, contact HMRC and ask them to split your personal allowance between your jobs so that you pay no tax.
If you do not do this, one of your employers will have to take basic rate tax (20%) off your earnings, even though overall you may not be due to pay any tax.
If HMRC do not agree to split your allowances, or you realise too late and tax has been paid, you need to claim a tax refund.
You can find out more about tax and National Insurance when you have two jobs in our factsheet ‘Having more than one job’.
My employer has not enrolled me into a pension scheme
If you believe that your employer has failed to comply with their requirements under auto-enrolment then you can report this to the Pensions Regulator using the whistleblowing service on their website.
I have been sent a tax return late-filing penalty but I should not have been in Self Assessment in the first place
Most employees working in the UK pay all their tax through PAYE and are not required to file a tax return. However, you may need to complete a tax return if, for example, you have income from property abroad or your tax affairs are complicated in some other way. If you are self-employed, you always have to complete a tax return unless your income from self-employment is less than £1,000.
If you are issued with a tax return that you do not consider you need to complete, because, for example, you are no longer self-employed or you paid all your tax under PAYE, you can phone HMRC and ask for the tax return to be withdrawn. If they agree, you will no longer need to file it and any penalties for missing the filing deadline will be cancelled.
I think my employer made an error with my PAYE – but HMRC have sent me the tax bill!
PAYE underpayments may arise due to your employer or pension-payer not operating PAYE correctly. For example, they may not have applied the tax code that HMRC sent to them or they may have been giving you tax and NIC relief for your travel expenses via the payroll. If this is the case, HMRC should first seek the tax from the employer or pension-payer, not from you.
If you think this has happened, but HMRC have sent you the tax bill, you can find out what to do in our factsheet 'Received a PAYE tax calculation?'.
Alternatively there are tax charities that may be able to help you depending on your circumstances. Tax charities include TaxAid and Tax Help for Older People. You may also find our getting help section useful.
I am having problems with my agency
If you are having problems with your agency – for example, you are concerned about the way that they are handling your pay and tax – it may be useful to know that you can contact the Employment Agency Standards Inspectorate (EAS). The EAS works with agencies, employers and workers to make sure that employment rights are complied with. You can contact them via an online form.
You can find out more about working through an agency in our factsheet on Agency workers.