# UK Tax equliasation questions



## Franky_fun (Apr 21, 2021)

Hi, i am relocated from Hong Kong to the UK 2 years ago as an expat. If I resign during the tax year (e.g last day in June), the tax equalisation arrangement (receiving salary in home country and company is paying the UK tax based on grossed-up salary) with my current employer will end accordingly.

I am a bit uncertain about my tax position. Let say if my salary for April to June is exactly the tax free allowance range (£12.5k), then my current employer should not be really paying any tax for this tax year. Therefore, will all part of my salary in the next UK job fully subject to tax, given the tax free allowance is being used up by the current employer?

I was led to believe they grossed up annual salary and pay the UK tax monthly on that basis. Upon the end of my employment, will/can they actually get back the tax they paid from me or HMRC?


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## Bevdeforges (Nov 16, 2007)

Tax equalisation is an agreement with your employer so it doesn't have any legal basis. But if you only work April through June of the current tax year, then the employer will probably base their portion of your taxes on the portion of the year that you worked for them. April to June is 3 months of the tax year - so they will recalculate your taxes based on your having worked one-quarter of the year, and thus they will "use" one quarter of your tax free allowance in determining the UK taxes they will pay.


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