Deadlines & decisions for UK Expats
2020 Countdown - Checklist for Brexit and tax to see out 2020
ProACT Sam highlights the deadlines and decisions that face UK Expats Living and Working Abroad before year end, for Brexit, for tax returns and return to the UK.
The coronavirus has made 2020 a difficult year in many ways. Completing the transition period and subsequent changes with ongoing corona restrictions will be interesting. The world moves on and Brexit and tax deadlines are looming, so here’s a review of the Expat decision-making deadlines for action running to the end of December 2020.
OCT 17-18th - BREXIT END GAME
We have heard ‘deadline’ so many times on Brexit but this time it’s different.
The UK has left the EU and is not coming back. Since 31st January 2020 the UK has been in a status quo transition agreement with the EU, during which not much changed apart from the fact that the UK has left the EU.
No post-Brexit trade deal is in place, and both sides, the EU & UK, are ‘declaring’ there is unlikely to be a trade deal before the last EU leaders’ summit of the year in October (the only place to ratify such a deal).
A no-deal Brexit means changes to VAT, customs and import arrangements for businesses trading cross-border. Trading between the EU and the UK goes on regardless however, the big change here is for UK and EU businesses. New ways of working need to be in place. This could cause confusion and delay at border crossing points.
We need to consider however, that Calais and Dover were ready for a no-deal Brexit before March 2019.
We can expect changes to take place, but a work-around will be found. Just as imports from the USA, Chinese and other goods find their way in and out of Europe: a process like this will be adopted.
Emergency summits could be held on into November or December, but with the UK stating they will not extend the transition, what is likely is for a short-term smoothing arrangement to be made that allows everyone to get on, although the EU may apply tariffs to UK imports.
DEC 2020 - RESIDENCY RIGHTS
Until the end of 2020, EU Expats including UK citizens can relocate and secure residency rights under EU Citizen rules. This means income and working requirements for residency are lower, and social insurance and medical benefits can be exchanged cross-country.
Anyone planning to start an Expat life in the EU or UK has the option to do so until the end of December 2020. After that date, non-EU immigration requirements are imposed. These requirements include higher income levels for individuals: Euro50k in Germany for example, or £30,000 in the UK.
UK Expats with existing property or business in the EU could still confirm their residency permits long-term under current rules. This cannot be done last minute or without relocation being proved.
For EU Expats in the UK, a pre-settled resident permit works in the same way as a residency permit. It provides the right to remain Living and Working Abroad with your family in that country for your lifetime with your family and dependants.
For example, in Cyprus and the UK, an EU Expat can, if still resident, acquire permanent residence after 5 years if they have an EU Citizen residency permit before the end of 2020.
New UK Expats would need to have an additional Greek language test in Cyprus, and EU Expats would need an English language test in the UK.
As all the official languages of each EU country are official languages of the EU, this does not arise for EU citizens.
Language tests will be a factor for Expats after Brexit.
MEDICAL & SOCIAL
The EU has a common social and medical arrangement that allows exchange of benefits.
Each Expat still needs to qualify for benefits under the rules of the new country of residence.
This means previous social national insurance payments can be credited to welfare and pension benefits, and possibly medical cover in the new country of residence.
If an Expat is working and paying social national insurance in the new EU country of residence, then, they can qualify for welfare pension and medical benefits under local rules of that country even after Brexit.
A UK Expat can use a company or business for the income and work in that EU country to create social insurance payments.
NOT WORKING MEDICAL
If not working, things are far from simple. Under EU rules, state retirement benefits can be transferred between countries, and for UK Expats that has included medical cover using the S1 scheme.
Temporary short-term working contracts and medically disabled can also benefit from S1 relations.
The EU will retain the health and social insurance agreements among member states, including the EHIC travel card that allows for medical treatment while temporarily abroad.
The UK will maintain the same system and the UK Government has committed to extending this with new agreements.
However, at this point there is no agreement for the UK to maintain reciprocal healthcare and social benefits with the EU, or EU countries.
Without an agreement with the EU, the UK will need to implement a new bilateral agreement with each individual country of the remaining EU27.
Without a new deal with the UK, expats could lose state health benefits overseas.
They may still qualify by working or based on the duration of their residence, or as a result of dual citizenship.
By the end of 2020 (probably around November), Expats need confirmation of the arrangements to confirm if private medical cover may be needed.
For more information about Brexit and healthcare, together with all the areas affected by Brexit for Expats Living and Working Abroad, download our guide.
DRIVEN to the END
Within the EU, Expats are not required to change their driving licence country by country.
After Brexit, Expats will fall under international rules, meaning long-term Expat residents will have to change driving licences to local after 6 months and this could well involve taking a new driving test.
UK Expats could change their driving licence now to a local one under EU rules and avoid the requirement for a driving test.
The same applies for EU Expats in the UK.
UK TAX YEAR ENDS
While Brexit comes to a year end, so do tax years.
Any UK Expat with UK income, or gains, or split year treatment needs to complete and submit a return.
Using split year rules can double allowances in a year. Be clear if you qualify to maximise your benefits. Moving at the start of a tax year is not always the best move.
OCT 31st - for UK paper returns.
JAN 31st - for UK online returns and payments.
Cyprus TAX YEAR END
Tax residents of Cyprus have a full return for 2019 to complete on worldwide income, with any balance of tax for that year also payable.
2020 tax payable is due by self assessment and payment in December 2020.
Some types of income in Cyprus are due at a flat rate in Cyprus, even by non-residents.
Expats can get exemptions from dividend, interest and health taxes, otherwise a separate self assessment of flat rate tax is to be made.
This is to be included on a full return.
Not everyone needs to complete a Cyprus tax return, only all those who have any Cyprus taxable worldwide.
OCT 30th - Full Cyprus Return 2019
OCT 30th - Balance of 2019 Tax payable
DEC 31st - self assessed income and business tax returns and payments.
MONTHLY - Self assessed, flat-rate taxes
ProACT FREE REVIEW
ProACT offer a free review online to help assess your situation and guide you on the steps to take for best tax efficiency and/or to assist you with residency requirements.
