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JHWUK Dec 5th 2010 4:53 pm

Relocation Expenses and TAX

I'm British and moving back to the UK from Florida in June 2011

I have been in Florida 3 years and the company I am working for are relocating me back to the UK and are paying all the removal costs.

I know there is a limit of 8000GBP for relocation expenses before you have to start paying tax in the UK.

But I have also read that foreign nationals are exempt from the travel and shipping costs of their things from abroad under section 373 and 374 ITEPA 2003. So they get "shipping to UK" + 8000GBP of expenses in the UK before they have to start paying tax.

Does anyone know if this also applies to non-UK residents such as myself.


Posidrive Dec 5th 2010 9:25 pm

Re: Relocation Expenses and TAX
From my experience, shipping costs appears to be a somewhat grey area and some companies with a lot of international employees manage to legitimately arrange the shipping without the taxes being passed on to the employee although I don't have a clue how this works. I would check with your employer since it would be up to them to declare any taxable benefits to the UK tax authorities via your P11D.

I would actually be quite intrigued as to how the UK can claim tax on the full amount any way since surely in most cases you are receiving much of the benefit before you become UK resident.

john5655 Dec 6th 2010 11:02 am

Re: Relocation Expenses and TAX
good point posidrive

I've just been through this

I arranged all the shipping and paid in full before we left for the return to UK, i.e. before I became tax resident here. My employer reimbursed me with a % of those expenses about a month later. I have no intention of declaring this as income arising whilst tax resident in UK.

BTW, the moving allowance is taxable in my country of origin and there is no tax treaty between the two jurisdictions.

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