karenst

Hi there
I am a dual citizen, and have lived in the UK for 14 years until December. I started my maternity leave and moved to the US (California) - at the moment I have the option to return to the UK in 2016 after my maternity is complete or I could stay here - I'm waiting until I get the hang of the parenting lark.

I'm confused about the P85 and the implications for someone in my position. Do I file it now (I get statutory maternity pay which start Jan 25 2015 and ends in October 2015)? California requires you to pay income tax (they don't do foreign tax credits like the Federal govt does apparently) on any income whilst in the state... and it's quite high (13% I think?) so it may be that I'm paying PAYE in the UK on my maternity (£138 / week) and then another 10-15% in California.

If this is just how it is, I'll pay the tax as I'm not trying to shirk civic responsibility in either country, but I didn't know if I should file a P85 now or if I decide to stay in the UK after my UK income stops?

Thanks in advance!

BritInParis

Whilst it's not mandatory, if you intend to living outside the UK for more than a tax year, then you should file your P85 now. There is an opportunity on the form to declare any UK income you might be still receiving, i.e. your maternity payments. As you won't have worked for all of this tax year it is likely you'll be due a tax rebate if you have been using PAYE when working.

karenst

Thanks for the quick reply!!

I got to the end of the form and it asks me for a P45, which I won't have until I officially leave my job... which won't be until the beginning of 2016... so I'm guessing I can't file this yet?

BritInParis

Good question. In that case you may not be able to do it until then. Unless anyone has the answer it might be advisable to contact HMRC and ask their advice. You don't want any rebate cheques going to your old address uncollected.

RICH

As long as you are on the UK payroll, PAYE will take care of itself. On statutory maternity pay only, there wont be much, if any tax involved, so just wait till you get the p45. I doubt you will see much refund due. You might see it in the first couple of pays of SMP before April.

Not sure what the US side will do, but you are not looking at large amounts of income, so any tax liability will be minor.

edit: Also SMP, 11/12 years ago when I was in Payroll, was something like 90% of average pay, for 6 weeks, followed by a fixed amount (£75 ish)for 18 weeks. I'm sure it is more & longer by now!