Taxed in Holland and the UK

[steter60]

HI
I worked in Holland this year between January and July, for a Dutch firm paying tax at source under the Dutch 30% tax rule. In the UK I am a Limited Company, which I froze while I was away and re-started on my return. I have just completed a Self Assessment and my accountants tell me I must pay UK tax on the portion of the money I earned in The Netherlands which was un-taxed. Obviously because of the 30% rule this is a sizeable amount, and also because of the time of year, it will happen again for tax year ending April 2020.
Is this correct? I had been led to believe that I only had to pay tax and NI etc. in the one country.

[jerome.lane]

You will report and pay tax on your worldwide income and gains if you are deemed UK resident for the tax year. You get a credit for foreign tax paid but it can't exceed the UK tax that would have been payable (i.e. you lose 10% if you are a 20% tax payer and have had 30% deducted).

You haven't explained what your untaxed Netherlands income is? If you received untaxed payments from your work in the Netherlands under a dual contract arrangement, then you could end up with more issues.

For simplicity, if you had £10k of Netherlands income with Dutch tax of £3k deducted and other income took you over the higher rate band, you would pay a net £1k of extra tax in the UK.

If you aren't in the higher rate band, then you won't have any extra tax to pay, but you have paid £1k more overall than you would have if working only in the UK.

[etf]

The following may assist your understanding of the original post. It covers a tax break the Dutch offer to attract employees with special skills/knowledge not readily available in the Netherlands.

General
63. The 30% ruling is a special tax regime available for
inbound employees who meet certain conditions.
Before explaining these conditions in more detail,
please find below the main features of the 30%
ruling:
‒ Upon granting of the 30% ruling, a maximum of
30% of an employee’s gross income from current
employment is considered to be a
reimbursement for extraterritorial costs and can
therefore be reimbursed tax free (i.e. regardless
of the actual extraterritorial costs incurred). This
means that if the conditions of the 30% ruling are
met, the employee will only be taxed on 70% of
his employment income. This will result in a
substantially reduced effective tax due (i.e. the
effective maximum rate is reduced to 36.2%
(70% x 51,75%)).

[ABiLiTieS Trust]

So basically 30% of the income will not be salary anymore. The cut of 36.2% here above will only be applicable in case all the salary requalified as expenses would have been taxed in the highest bracket.