Life in the United Kingdom is definitely easier with a car, especially if you live in a rural area or just a little bit off the beaten path. Expat living in London often makes owning a car seem rather unnecessary, but Britain’s charming countryside may provide less in the way of public transport. However, having a car in the UK entails quite a few requirements – and we aren’t only talking about getting used to driving on the left side of the road!

Driving Permits

First of all, you should check if you are even allowed to drive a car in the UK. If you are planning to stay for less than a year, e.g. for a business project or as a visiting student, you can just keep using your overseas driving permit. Everyone who would like to reside in the United Kingdom for over twelve months, though, needs either a “community license” or a British permit.

A community license is one that was issued in any EU or EEA member state. So, if you move from Spain to England, for example, your driving license will simply stay valid. Drivers from most other countries, however, have to apply for a provisional driver’s license and pass a driving test. There are a few exceptions: If your original license is, for instance, from Australia, Canada, or New Zealand, you can just swap it for a UK one without the test. Unfortunately, there’s no way around the driving exam for lots of non-European expatriates.

Car Imports

Obviously, a driving permit isn’t much use without a car. If you’d like to bring along your own car when moving to the UK, you have to be aware of British import requirements. In case that you’d like to drive in the UK for six months or less, you can go on using your old car. You don’t have to register it, and you needn’t pay any vehicle tax. For short-term expats from all EU member states, this is par for the course. But if you arrive in Britain from outside the EU, contact the customs office as soon as your car is shipped there. They may have to decide on a case-by-case basis if you can import the vehicle for personal use, even if it’s only for six months. Car imports from outside the European Union may also require you to pay customs duties and import tax.

Vehicle Registration

If you take up residence in the UK, your car needs to pass certain standard inspections. It must also be registered in Britain. First, the Vehicle Certification Agency must confirm that your car meets specific requirements for the UK (e.g. a speedometer which shows both km/h and mph). Cars imported from non-EU countries, e.g. from North or South America, must then undergo an additional examination, the Standard Approval Test. And then, your car still has to go through the so-called MOT test, a routine inspection according to Ministry of Transport guidelines. Only then can you go to the DVLA (Driver and Vehicle Licensing Agency) for registration.

Considering all this effort, it may be easier just to lease or buy a car directly in the UK. But no matter where you have purchased it, if you own the car, you always have to get car insurance and pay vehicle tax. Once you’ve paid the required taxes for your car, you will get a small tax disc to put on display on its windshield. Vehicles that do not have an up-to-date tax disc may be clamped or impounded, so don’t forget about your vehicle tax!

-------- Beginnig of the letter -------------

<Date>
<Your full name>
<Your address>
<Your National Insurance Number (NIN)>

Dear Sirs,
I am writing to request a repayment of an overpayment of Income Tax for the tax year <tax year you are claiming the refund (e.g.: 2009/10>. As noted in the enclosed forms, I left the UK on <date you left the UK> and think I have overpaid Income Tax. According to my calculations, I have paid £ <amount in pounds according to your calculations> in excess.
Please find enclosed a copy of my P45 along with the P85 which should provide a complete work history for your records.

If you have any further questions please do not hesitate to contact me on <e-mail address> or <phone number>.

Yours sincerely,
<Your full name>
<Your signature>

-------- End of the letter -------------

Some things to consider:

• Make a copy of all the information you will send to the Tax Office in the UK.
• Remember that the letter should be addressed to your appropriate Tax Office, not a random one. If you send the letter to the wrong office, they will reject it. They will not forward the letter to your appropriate tax office.
• Send the letter by certified post to have proof that the letter has been received.
• While not mandatory, it is recommended to include your own calculated refund amount in the letter.

You can find further information about the entire process of making the UK Income Tax refund claim in the following entry: Tax Refund when you leave the UK: PAYE, P45, P85.

In a previous post I had explained the steps to follow in order to prepare a successful tax refund claim, specifically for Income Tax or PAYE (Pay As You Earn), once you stop working in the United Kingdom: Tax Refund when you leave the UK: PAYE, P45, P85.

Well, I must say that my claim was successful and the money was already paid into my British bank account and last week I received a letter from the HM Revenue & Customs with the tax refund calculation details, along with a practical guide called "Understanding your Tax Calculation". The refund amount I had previously calculated was correct and the money was paid into my bank account with no problems, within a reasonable period of time. The whole process took me about a month, so the main purpose of this post is to encourage claiming the tax refund to all those who have given up, thinking that it will be a long and bureaucratic process, and probably will not get what they want.

Below is a chronological summary of the steps I took to get my money back:

• September 14th: I sent all the required documentation (P45 Parts 2 and 3, P85) to the tax office in the UK by certified post along with a handwritten letter indicating my own calculation.
• September 21st: The letter arrived to the appropriate Tax Office in the UK.
• October 16th: The claimed amount was deposited into my British bank account whose details I had provided in the form P85.
• October 29th: I received a letter by post from the appropriate UK Tax Office stating that my claim was accepted and the money will be paid into my UK bank account provided in the form P85. The letter had been sent on October 8. You can see the first page of this notification on the picture included in this post.

As you can see, the entire process since I sent the letter until I received the formal answer from the UK Tax Office, took about 45 days. 30 out of those 45 days were notifications travel time. The overall time elapsed from the day the UK Tax Office received my letter (September 21^st) until they sent me the formal notification (8^th October) was only 18 days.

As a final comment, if you don’t own a bank account in the United Kingdom, they can send you a check along with the formal notification (you also can provide a friend’s bank account in the form 85). The UK Tax Office doesn’t make payments into foreign bank accounts.

Basic Services

It would be very difficult to live without them during your time in England:

• Water: The main provider is generally a local company where you live. The cost is usually an annual fixed amount, and like most other utilities in the UK, you have the option to pay the full amount in one single payment or split it through installments. If you choose to pay the full annual amount on one single payment, you generally receive a 10% discount. In my case, in Leeds, the monthly cost was 20 pounds, so consider that your amount will be around that amount. And as I previously said, the cost is usually fixed so you will avoid surprises at the end of the month.
• Electricity: There are a lot of players on the electricity so you will have several providers to choose from with different offers. For example, two of the biggest companies are Scottish Power and npower. The monthly cost will obviously depend on your consumption. But be prepared to pay no less than 60 pounds a month. Your energy consumption will depend on whether you live in a full electricity apartment or you have gas also. If you have gas, this cost will be split between gas and electricity bills. Before renting, you should also ask the landlord if the apartment has Economy 7 energy system, very common in the UK. Economy 7 energy system consists in a device installed in your flat that stores energy at night, period of the day when electricity costs are cheaper and then, the stored energy is used during the rest of the day. This system will considerably reduce your monthly bills. As a tip, don’t make the common mistake of turning off the heating system when leaving your apartment, since it is better to have it permanently running at an average level rather that turn it off and let your apartment cool down completely. When you turn it on again, the heater will spend the same power you saved, probably more. As an alternative, you can arrange a monthly average payment with your energy supplier to keep monthly bills at a fixed cost and avoid surprises. But bills are amended quarterly to reflect your actual consumption, so if you spend more than the fixed cost you arrange, your installments will be adjusted after 3 month to reflect that. On the other side, the provider will reduce the installments cost if you spend less.
• Gas: In my apartment I didn’t have gas and you will probably be in the same situation, since gas is becoming less common in the UK. In case you have gas, the providers usually are the electricity ones, and they offer comprehensive plans for both utilities in one bill. You should probably pay for gas plus electricity an average price of 80 pounds per month.
• Council Tax: It’s an annual tax you pay for services provided by the city council in your area: garbage collection, street lights, cleaning, etc. The price you pay depends on the area where you live. There are several categories (A, B, C, D, etc.) so you should ask your owner which category you are in. In my case, in Hyde Park area in Leeds (university area) I used to pay around 800 pounds annually. In London, according with some Londiners I have talked to, you will have to pay at least 1000 pounds annually. You don’t need to pay this amount in one single payment and you can pay in monthly installments. But if you pay the full amount in one single payment, you will get a discount. You can also obtain a 25% discount if you are the only resident in your department or if all residents are students.

Optional services

You can live without them if you want to save around 50 pounds a month, but is almost sure you will want to count with them:

• Phone: British people are addicted to cell/mobile phones, so it’s more important that you count with a mobile rather than a standard line telephone. For those people that live or have lived in the US, be aware that in the UK, cell phones are called mobiles. The only reason to have a residential phone line is for Internet access. Broadband Internet access via cable modem is not very common in the UK, and ADSL is the more common type of access, for which you need to have a phone line, or BT line, as they call it. BT It’s worth mentioning that BT is the traditional phone company in the UK and actually was the only one for long time. For that reason, phone lines are often better known as BT lines. But now you can choose among other providers, so when you read you need BT line, not necessarily means that needs to be provided by BT. Prices? There are many plans but the cost of a basic contract with BT costs about 11 pounds a month and includes free calls to UK’s landlines on weekends and every day after 6p.m.
• Internet: There are several providers: Virgin, Sky, BT, O2, Vodafone, etc. Virgin and Sky are the only ones that currently offer cable modem services. But not all areas are covered. Generally you can find out if your area is covered inserting your post code in the provider web page. There are plenty of offers but let’s say that for 15 pounds a month you will have a good connection and if you contract with Virgin or Sky you could get an offer that includes free cable TV channels for a given period of time. Then you will have to pay for it separately.
• Television: By default, you will have access to the public channels (BBCs and ITVs), plus additional local channels. If you want more private channels you will have to contract a TV cable provider like Virgin or Sky (the most popular). But that's not all, in England you will have to pay a TV license. That means that the public channels are not completely free, since you they are maintained with this tax. You will have to pay around 10 pounds a month if you have color TV (a little bit less if you have a black and white one, but ... who has a black and white TV in these days?). No matter if watch TV or not, the mere fact of having a TV in your apartment makes you liable to license TV tax, even if you use it only to watch DVDs movies. So if you do not intend to use a TV at all, ask your landlord to remove it from your apartment. Believe it or not, TV license payment is very well monitored by the authorities and if you don’t pay, they will knock to your door soon with evidence that you have TV and you are not paying. England is probably one of the toughest countries in pursuit of taxes and penalties for people not paying.

As a conclusion of this long entry, the best source of information about prices and offers for a particular utility can be found in any price comparison site, very common in the UK, such as moneysupermarket.com. It’s a very useful site where you can select the utility you want to compare prices and submitting your zip code, it will return several prices, offers and providers in your area, even different offers from a single provider. You can also contract some offers directly online using this web page.

Leave us a comment if you would like more information about a particular utility.

Good luck with your cost of living estimation.

UPDATE 29th October 2009: The tax claim I made has been successful and I've received the payment into my UK bank account. Find the details of my story on the following entry: Successful tax refund claim when leaving the UK: PAYE, P45, P85.