When moving abroad as a UK tax resident, many wonder: Does HMRC know if you move abroad? What is the HMRC’s role in this?
It’s essential to understand HMRC’s involvement in your departure, as they manage tax residency and compliance.
Notifying HMRC ensures that your tax status is properly updated and avoids complications, as HMRC may have access to information through international agreements.
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This article will explore whether HMRC knows if you move abroad, the consequences of non-compliance, and the steps required to notify them when leaving the UK.
What Is HMRC?
His Majesty’s Revenue and Customs (HMRC) is the UK government department responsible for collecting taxes, enforcing tax laws, and managing benefits and customs.
What Is HMRC’s Main Role?
For those moving abroad, HMRC’s role extends beyond domestic tax collection—it plays a central role in overseeing tax compliance for both individuals and businesses, whether they live in the UK or move abroad.
It monitors UK taxpayers’ obligations worldwide, focusing on whether individuals remain UK tax residents, earn UK-source income, or dispose of UK assets that could trigger capital gains tax.
In particular, UK expats must be aware that HMRC tracks residency status to determine tax liability under UK law, including rules like the Statutory Residence Test.
HMRC also plays a role in enforcing international tax agreements, ensuring individuals meet their tax reporting duties even after leaving the country.
Understanding HMRC’s functions is key to knowing your obligations when you leave the UK, especially around income tax, capital gains, and residency status.
Does HMRC Know if You Move Abroad?
Many people wonder whether HMRC automatically knows if they leave the UK.
In reality, HMRC doesn’t directly monitor your physical movements, but it can access information through tax treaties, international reporting agreements, and data-sharing systems like the Common Reporting Standard (CRS).
Under these systems, overseas banks and financial institutions report account details of UK taxpayers to HMRC.
Employers, pension providers, and financial institutions may also notify HMRC if you change your tax status or mailing address to one outside the UK.
While HMRC may not instantly know you’ve moved abroad, failing to formally inform them can lead to tax complications, missed notices, or penalties.
In short, while HMRC doesn’t track your travel in real-time, its global information-sharing networks make it harder to disappear from the UK tax system without formal notification.
What Countries Are Reportable to HMRC?
HMRC receives financial account information from numerous countries through international agreements designed to combat tax evasion.
The two primary frameworks facilitating this exchange are the Common Reporting Standard and the Foreign Account Tax Compliance Act (FATCA).
Common Reporting Standard: Developed by the Organisation for Economic Co-operation and Development (OECD), the CRS enables the automatic exchange of financial account information between participating jurisdictions.
As of February 2025, over 100 jurisdictions have agreed to share information with HMRC.
Recent additions to this list include Armenia, Georgia, Moldova, and Ukraine.
Foreign Account Tax Compliance Act: En virtud de la UK-US agreement to implement FATCA, UK financial institutions report information on accounts held by US persons to HMRC, which then forwards this data to the US Internal Revenue Service (IRS).
These agreements ensure that HMRC is informed about UK taxpayers’ overseas financial accounts, enhancing transparency and compliance.
What Happens If You Ignore HMRC?
If you ignore or just forgot to tell HMRC you’re moving abroad, you could face unexpected tax liabilities, penalties, or interest.
HMRC may continue to treat you as a UK tax resident until formally notified, meaning you might be taxed on your worldwide income even if you’ve left the country.
Failing to submit forms like the P85 or update your address can also delay tax refunds or trigger compliance reviews.
If HMRC discovers undeclared foreign income or a change in residency through information-sharing agreements, penalties for non-disclosure may apply.
To fix this, you should notify HMRC as soon as possible by submitting the appropriate forms and clarifying your residency status.
Seeking advice from a tax professional can help minimize penalties and ensure compliance going forward.
How to Tell HMRC You’ve Left the UK
If you’re leaving the UK permanently or for an extended period (generally a full tax year or more), you’re required to inform HMRC.
Short-term trips or temporary moves usually don’t require notification, but anyone leaving for good must formally update their tax status to avoid being taxed as a UK resident.
The main way to notify HMRC is by completing a P85 form, which helps determine your residency and tax obligations going forward.
Here’s how to notify HMRC:
- Complete the P85 form – Available online through your Government Gateway account or as a downloadable paper form.
- Provide required details – Including your departure date, employment history, overseas address, and income sources.
- Attach your final payslip or P45 – If employed, include this to ensure correct tax calculations.
- Submit promptly – Ideally submit the P85 soon after leaving the UK, preferably within the same tax year, to avoid delays in refunds or assessments.
Submitting the P85 ensures HMRC updates your residency status and prevents unnecessary UK tax liability while you live abroad.
Can I Come Back to the UK After Filing the P85 with HMRC?
Yes, you can return to the UK after filing the P85 form with HMRC.
However, coming back may affect your UK tax residency status, depending on how long you stay and your ties to the UK.
Filing a P85 signals you’ve left the UK for tax purposes, but it doesn’t permanently end your tax obligations if you return.
Key considerations:
- Residency reassessment – HMRC may classify you as a UK tax resident again if you spend significant time in the UK or maintain strong connections (such as property or family).
- Tax implications – Returning could make you liable for UK tax on worldwide income from the date your residency restarts.
- Split-year treatment – In some cases, you may qualify for split-year treatment, meaning you’re taxed as a UK resident only for the part of the year you’re living in the UK.
It’s important to keep records of your travel and ties to determine your residency under HMRC’s Statutory Residence Test.
Returning temporarily or permanently could trigger different tax obligations.
What Happens to My UK Company if I Move Abroad?
If you own a UK company and move abroad, your business remains subject to UK tax laws.
HMRC will continue to expect corporate tax filings, VAT returns (if applicable), and payroll compliance if you employ staff in the UK.
Your personal tax residency status does not automatically change the company’s tax obligations—UK companies are taxed based on where they’re incorporated and managed.
However, if you start running the business from abroad, HMRC may assess whether the company’s central management and control has shifted overseas.
In some cases, this could trigger tax residency rules in another country, leading to double taxation risks or new reporting requirements.
To stay compliant, you may need to appoint a UK-based director, maintain a registered office in the UK, and seek tax advice on international operations.
It’s essential to plan ahead to avoid penalties and unintended tax consequences.
What Happens if You Don’t Respond to HMRC?
Failing to respond to HMRC’s inquiries, especially regarding your residency or overseas income, can have serious consequences.
HMRC may assume you’re still a UK tax resident and continue to tax you on worldwide income.
Here’s what can happen if you ignore their communications:
- Estimated tax assessments – HMRC can issue tax bills based on assumptions, which may not reflect your actual situation.
- Penalties and interest – You may face fines and accumulating interest for unpaid taxes if HMRC believes you owe tax as a UK resident.
- Legal action – In severe cases, unresolved tax liabilities can lead to enforcement measures, such as court action or asset seizures in the UK.
Responding promptly and providing clear documentation about your residency and income is crucial to avoid these risks.
Proactive communication with HMRC protects you from incorrect tax assessments and penalties.
Why It’s Crucial to Inform HMRC of Your Move Abroad
Informing HMRC when you move abroad is essential to avoid unexpected tax liabilities, penalties, and compliance issues.
Timely notification ensures your tax affairs are properly managed and reduces the risk of complications with your UK residency status.
If you’re unsure about your obligations, seeking professional tax advice can help you navigate international tax rules and protect your financial interests.
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Adam es un autor reconocido internacionalmente en temas financieros, con más de 830 millones de respuestas en Quora, un libro muy vendido en Amazon y colaborador de Forbes.
