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I have been living in Germany for three years and working for a London-based company (as an employee) remotely from home. (I lived in the UK between 2012 and 2015.)

I sent P85 to HMRC back in September 2017 and they assigned a tax code "NT" to me in August 2018 and sent me a refund of all the taxes paid between April 2018 and August 2018. (I had also filed tax returns for years ending April 2016 and April 2017 and got refund for all the taxes I paid in the UK while living in Germany, as expected.)

Now I have received a letter from HMRC saying that I haven't sent them a tax return for the year ended 5 April 2018. Question: Why are they asking me for that? I thought that having sent them P85, being assigned code "NT" and being refunded everything they should no longer need me to file a tax return. I paid zero and claim zero, period.

Thank you.

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Your tax code is just a way of telling your (UK) employer how much to deduct from your gross pay. NT means Nil Tax so if you earn any UK income you would not have to pay tax on it (in your case, because you are already paying tax in Germany and there is a dual taxation agreement between the UK and Germany).

That is completely separate from whether or not you need to submit a tax return, which is a way to declare your income etc to HMRC so that they can calculate whether you need to pay any tax on any of it (note it's not just employment income but eg rental payments if you own property, interest on savings, etc etc etc that gets entered on the tax return).

In your situation, you should still submit a tax return, the net effect of which will be that you don't end up having to pay any tax.

The information here suggests that you may not be able to submit online through the Government Gateway, which is a bit of a pain:

Non resident tax returns
Generally you have to submit a Self Assessment tax return if you are a non resident tax payer. It’s worth knowing that HMRC’s free on-line system does not let you complete the necessary pages for being a non resident. Only commercial software can be used to submit a tax return (including non resident pages) online. Sometimes another type of HMRC form will be needed like an R43.

  • Thanks very much for your answer. Does that mean that as long as I work for the UK company, I will need to keep filing tax return every year? When I leave the company, do I need to tell HMRC that I'm no longer a tax payer? – pr83 Apr 11 at 9:06
  • @pr83 Had HMRC actually told you to file a tax return, before the point where you got the reminder/complaint that you hadn't done it? As Vicky says, having to file a tax return is orthogonal to your tax code, and it seems like it's normally the case for non-residents, but you should still be notified of this by HMRC first. – Ganesh Sittampalam Apr 11 at 9:28
  • @GaneshSittampalam I'm not aware of that, but I could have missed something. I remember that in 2016 they sent me a paper letter explicitly asking me to file a tax return. But not last year. I have just checked my messages at tax.service.gov.uk/personal-account, but there aren't any. Not sure if they have been deleted. – pr83 Apr 11 at 9:47

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