Personal Tax Free Allowance

I am so confused, I hope I make sense:

I was here in 2008 on BUNAC, entering the country Feb 12 and leaving Aug 12. Exactly 6 months. In that time I worked for a total of 5 months earning approximately £8k. I received the tax free personal allowance up to the ~£4k threshold.

I returned to the UK in July 2009 on a spousal visa and have been working since Sept 2009. I filled out my P85 and P86 forms (Leaving the UK and Entering the UK, respectively) with the intention of claiming a repayment as I did not earn for a full 12 months.

So now I've received a letter on Friday from HMRC stating that, for taxation purposes, I was NOT considered a resident or ordinary resident during that period and therefore was not entitled to tax free personal allowance and in fact will be liable for repaying them!!! Is this right?!?

What constitutes 'resident' as the following from the HMRC website leaves the first sentence pretty open-ended:

Q13: In what circumstances will I be treated as a UK resident for UK tax purposes?
A13: To be treated as resident in the UK you must normally be physically present in the country at some time in the tax year. You will always be treated as resident if you are here for 183 days or more in the tax year. There are no exceptions to this. You count the total number of days you spend in the UK - it does not matter if you come and go several times during the year or if you are here for one stay of 183 days or more. If you are here for less than 183 days, you may still be treated as resident for the year if you visit the United Kingdom regularly and your visits average 91 days or more a tax year over a period not exceeding 4 years.

The normal rule is that days of arrival in and departure from the UK are ignored in counting the days spent in the UK.


Ummm, what?!?!! Really?! Because this wonderful tidbit of information really doesn't do many favours for a lot of people.

Can anyone shed some practical thought on this???

Thanks...

Two thoughts --

(1) You completed your P85 and/or P86 incorrectly.

(2) While the stated reason for you not getting your PA was that you were not ROR (which may have just been a form letter response), it may actually be the case that they did not give you your PA because you are a non-domiciled individual and they assumed you were claiming the remittance basis.  There assumption may have been based on your P86 responses (see point 1 again).

Short answer, you need to call them and understand what is leading them to believe that you are not eligible, so that you can then correct the data.

You may find it is just easier to file a tax return after all the faffing around you are probably going to have to do anyway.