Tax years do not align. The United Kingdom runs from 6 April to 5 April, Australia and New Zealand from 1 July and 1 April respectively, Japan from 1 January with a March filing season, and most of Europe on the calendar year. Anyone who has moved between two of these has spent a confusing first year.
Tax years and deadlines
Who actually has to file
The bigger question for most employees is whether a return is required at all. Three broad categories exist.
- Almost nobody files. The United Kingdom and Ireland, where cumulative payroll settles the position for employees with a single job and no other income. Filing becomes necessary above certain income levels, with rental or investment income, with untaxed benefits, or as a company director.
- Almost everybody files. The United States, where a return is the normal annual obligation for any individual above a low income threshold, and Spain and Italy above modest thresholds.
- Filing is optional but profitable. Germany and Austria for employees on a single employment, where the return usually produces a refund and not filing simply leaves it unclaimed.
The middle category is where penalties live. The outer two are where money is lost quietly.
What triggers an obligation for an employee
Even in the countries where most employees never file, a short list of circumstances brings you into the system.
- Two or more simultaneous employments, because neither payroll can see the other. See taking a second job.
- Income above a defined threshold. The UK uses one for the high income child benefit charge and another for the personal allowance taper.
- Untaxed income of any size: rent, dividends above an allowance, foreign income, crypto disposals.
- Claiming relief that payroll cannot give: higher rate pension relief, large work expenses, charitable giving relief.
- Being tax resident in two countries in the same year, or moving mid year.
- Receiving equity that vested, which frequently requires a return even where withholding occurred. See RSUs and share options.
Payment dates are not filing dates
A common and expensive misunderstanding. In the United Kingdom, the filing deadline and the payment deadline coincide on 31 January, and a payment on account for the following year falls due at the same time, which doubles the bill for anyone filing for the first time with significant untaxed income.
In the United States, an extension to file is not an extension to pay. Tax is due in April regardless of when the return is submitted, and interest runs from that date.
In Germany and the Netherlands, the assessment follows the return by weeks or months, and payment is due after the assessment is issued rather than on filing.
Practical points when moving country
The year of arrival and the year of departure are the two that cause difficulty, because both countries may require a return and the split year rules are not automatic. In most systems, claiming split year treatment requires a specific election on the return rather than happening by default.
Keep the final payslip and the annual statement from the country you left. Reconstructing a partial year's foreign income without them is unpleasant, and every treaty claim depends on documenting what was taxed where. The residence side is covered in 183 day rule.