LSR Partners LLP

Moving overseas for work and planning to split your tax year?

There is a condition in Case 1 that surprises people. You must meet the full time work abroad test in the following tax year as well. Being non-resident under a different test is not enough.

The rule exists because Case 1 is designed for people genuinely going overseas to work. Simon and Laura explain in the latest episode of the Tax Compass Podcast.

Listen wherever you get your podcasts, or watch on YouTube (link in comments).

Why does split year treatment exist at all?

Because the UK residence rules can make you tax resident for a full year from the day you start a UK job. If the rules work that quickly on the way in, it is only fair that there is a way to split the year when your life genuinely straddles two countries.

Simon and Laura explain the logic in the latest episode of the Tax Compass Podcast. Listen wherever you get your podcasts, or watch on YouTube (link in comments).

Episode 21 of the Tax Compass Podcast covers everything you need to know about employment income and UK tax.

PAYE and how tax codes actually work. Why payroll cannot fix a wrong code. Simple assessment and the 600,000 estimated overpayments. Benefits in kind, P11D versus payroll, and the April 2026 abolition. Pension contributions, salary sacrifice, relief at source, unclaimed higher rate relief, over-contributions and tapering. The salary sacrifice cap and why acting now matters. Equity awards, bonuses and the £100,000 personal allowance threshold. And the simple assessment bills that arrive for employed people who thought their tax was handled.

If anything in this episode has raised a question about your own position, get in touch with LSR Partners.

Watch here: https://buff.ly/rNk2hoR or listen on Apple Podcasts and Spotify.

Book a call at lsrpartners.com or email [email protected].

LSR Partners help you pay the right tax in the right place at the right time.

We get a lot of questions through the YouTube channel. And the honest answer to most of them is the same.

It depends on your specific situation.

That is not us avoiding the question. It is the reality of cross-border tax. The details matter enormously, and giving generic answers to specific situations does more harm than good.

What we can do is talk to you properly.

LSR Partners offer an initial consultation at lsrpartners.com. It is a chance to run through your circumstances with Simon or Laura, understand the key issues relevant to your situation, and work out whether and where proper paid advice makes sense.

If you have had questions about fees, Simon addresses that directly in this short. The initial consultation is designed to be genuinely useful from the first conversation.

Visit lsrpartners.com to book a call or drop us a message through the contact form.
LSR Partners help you pay the right tax in the right place at the right time.

The toughest client conversations Simon has are not with people who have investment income, rental properties and overseas assets. Those clients understand why a tax bill arrives.

The hardest conversations are with people who are simply employed, on a 1257L tax code, with nothing unusual about their payslip, and a simple assessment arriving to tell them they owe HMRC over £5,000.

The explanation: a bonus or equity vesting event pushed their income above £100,000. Their personal allowance reduced and eventually disappeared. The tax on the lost personal allowance was never collected through payroll because HMRC did not know the additional income was coming. Simple assessment catches it at the year end.

The tax owed is always 40% or 45% of the personal allowance amount. Around £5,000 to £5,600. On a payslip that looked completely normal.

Most people genuinely cannot get their head around owing HMRC money when they are employed and on PAYE. This episode explains exactly why it happens.

You have a relief at source pension and you pay higher rate tax. You assume a call to HMRC will sort out your additional relief through a tax code adjustment.

Simon describes this assumption as a fiction.

The tax code route exists in theory. In practice it is unreliable, slow and frequently imprecise. He calls it a tax code mumble. HMRC makes an approximate adjustment that may or may not reflect the relief you are actually entitled to.

The right route is a self assessment tax return. It handles the calculation precisely and produces the correct relief. Pensions are one of the most common reasons why people who believe they do not need to file a tax return actually should be doing so.

Higher rate taxpayers with relief at source pensions who have never filed a return to claim their additional relief are almost certainly paying more tax than they need to. Year after year. Without realising it.

LSR Partners help you pay the right tax in the right place at the right time. Book a call at lsrpartners.com.

The government is capping salary sacrifice pension contributions at £2,000 per year. It was presented as a minor administrative change. Simon and Laura describe it as a stealth tax rise.

The real impact falls on employers. Salary sacrifice currently reduces the salary on which employer National Insurance is calculated. Cap it at £2,000 and employers lose that National Insurance saving on contributions above the threshold. The financial incentive that made generous matching contributions worthwhile largely disappears.

The likely result is that employers who currently offer generous matching will reduce or remove it once the cap comes in. The window to benefit from existing matching arrangements is closing.

Simon's message: over the next 18 months, maximise your employer pension contributions while the current rules still apply.

Episode 21 of the Tax Compass Podcast covers the salary sacrifice cap and what it means for your pension contributions.

LSR Partners help you pay the right tax in the right place at the right time. Book a call at lsrpartners.com.

You have left the UK. You understand the income tax on your RSUs. The grant to vest period, the time apportionment, all of it makes sense.

But why are you still paying National Insurance?

National Insurance on equity awards follows the same grant to vest principle as income tax. The proportion of the vesting period during which you were subject to UK National Insurance determines how much of the award remains subject to NIC at the point of vesting, regardless of where you are when it vests.

So far so consistent. But here is where it gets complicated.

If you have moved to an EU country and hold an A1 certificate confirming you remain within the UK National Insurance system, your NIC position and your income tax position can diverge completely. You may have broken UK tax residence, meaning the non-UK element of your equity income falls outside income tax. But because the A1 certificate confirms you are still in the UK National Insurance system, NIC continues to apply to that same element.

You owe National Insurance with no corresponding income tax liability on the same award. The two calculations point in different directions.

This is one of the most common areas of confusion for clients with trailing equity income after leaving the UK. And it is one where assuming the tax and NIC treatments are aligned leads to the wrong answer.