# Impact on tax equalisation if I resign for another UK job



## Franky_fun (Apr 21, 2021)

Hi, i am relocated from Hong Kong 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?

Thank you!


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## nyclon (Apr 3, 2011)

I’ve moved this to the tax forum where you should get more input.


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## nikkisizer (Aug 20, 2011)

Franky_fun said:


> Hi, i am relocated from Hong Kong 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?
> 
> ...


Hi Franky_fun,

At the end of the tax year HMRC will collect or refund any tax balance once the annual tax calculation has been performed taking into account all Employers.


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## stuartcroftontax (May 6, 2021)

Hello Franky_fun

The answer will depend on the tax equalisation policy that you have agreed to. In prior employments working in Big 4 Professional Services firms running Global Mobility programmes for expats like yourself, most equalisation calculations were either done at the top rate of UK tax or all rate bands and allowance were split evenly between employee and employer.

I would imagine that your employer is calculating grossed up UK tax on a monthly basis on the assumption that you will be employed for a full year - so that is, dividing rate bands and allowances by 12 - through MODIFIED PAYE. If you leave employment part way through a year and begin working for a UK employer on a local basis, you would move to actual PAYE rather than MODIFIED.

A reconciliation would be provided with the UK Tax Return to determine the apportionment of the rate bands and allowances vs the amount of MOD PAYE paid by the employer in the period April to June.

<snip>

Cheers

Stuart


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