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Where Taxpayers and Advisers Meet

Declaring foreign earnings on self assessment (non-resident)

maputan
Posts: 3
Joined: Sun Dec 01, 2019 10:13 am

Declaring foreign earnings on self assessment (non-resident)

Postby maputan » Sun Dec 01, 2019 10:41 am

Hi, I'd be very grateful for any advice people can give me on declaring foreign earnings on my self-assessment form as a non-resident.

Background: I've been working abroad for many years, and have never completed a UK tax return as I had no UK income. For the year 2018-19 I had a small UK income (all interest payments --about £300 which had tax withheld on it by the payer, and about £100 which was paid gross). I also had approximately £1300 of interest on EU investments. My only earned income was £27000 earned abroad, some of which was remitted to the UK (30% of it could not be remitted). I receive the full £27000, and the overseas employers should be paying foreign taxes on that on my behalf, but the chances of getting written documentation of that are minimal.

I filled in a self-assessment return and mistakenly declared the £27000 both in the earnings section and the Interest section in the Foreign pages (completely my fault). Understandably I was sent a large tax demand.

I've called a couple of times, and my understanding is I need to write them a letter asking to amend my return, specifically by removing the £27000 from the Foreign Interest section. I was also told that even as a non-resident, I would be liable for tax on any income which I remitted to the UK.

So I think my questions are:

-- Should I declare the £27000 anywhere on the self-assessment form? (Or can it just be omitted?)

-- Am I liable for tax on any income remitted to the UK?

-- Box 1 on the Foreign page asks about income "which you were unable to transfer" to the UK. Does this mean if I choose not to transfer it to the UK, I shouldn't tick that box?

Thanks for any thoughts you can give me!

etf
Posts: 621
Joined: Mon Nov 02, 2009 5:25 pm

Re: Declaring foreign earnings on self assessment (non-resident)

Postby etf » Mon Dec 02, 2019 10:21 am

If you qualify as non-UK resident you will not be subject to UK tax on your overseas salary for work you perform outside the UK*. Take a look at the 3rd automatic overseas test (full-time work overseas) to check you meet the relevant conditions.
I was also told that even as a non-resident, I would be liable for tax on any income which I remitted to the UK.
My text book states 'the remittance basis of assessment is irrelevant to a non-resident employee's earnings for their non-UK duties, which are not taxable in the UK at all'.

I'm sure the advice provided to you had no malicious intent, but hopefully some Tribunal judges will clock that sometimes getting your tax affairs correct is not just a case of phoning HMRC's helpline. I suggest you telephone HMRC again and ask to speak to a residence specialist.

* There is an exception to this rule if you are a Crown Servant

maputan
Posts: 3
Joined: Sun Dec 01, 2019 10:13 am

Re: Declaring foreign earnings on self assessment (non-resident)

Postby maputan » Mon Dec 02, 2019 10:48 am

Thanks for the reply, etf. Yes, I definitely meet the 3rd automatic overseas test.

Before I call again, can anyone advise on the question of where (or whether) I need to declare the overseas salary?

etf
Posts: 621
Joined: Mon Nov 02, 2009 5:25 pm

Re: Declaring foreign earnings on self assessment (non-resident)

Postby etf » Mon Dec 02, 2019 11:09 am

Assuming all of your work was performed outside the UK i.e. no UK duties, you won't need to detail your overseas salary on your UK tax return.

maputan
Posts: 3
Joined: Sun Dec 01, 2019 10:13 am

Re: Declaring foreign earnings on self assessment (non-resident)

Postby maputan » Mon Dec 02, 2019 11:38 am

Great, thank you again!

maths
Posts: 7598
Joined: Wed Aug 06, 2008 3:25 pm

Re: Declaring foreign earnings on self assessment (non-resident)

Postby maths » Mon Dec 02, 2019 3:36 pm

I'm not even sure you have an obligation to file a UK tax return as a non-resident assuming HMRC did not send you one for completion.

You seem to have no UK tax charge arising.

As a non-resident you are not subject to income tax on any salary attributable to non-UK duties whether you remit any of it to the UK or not. Such income would thus in any event not need to be disclosed.

As you have filed a Return putting you on HMRC's radar, albeit incorrectly, I suggest you write to HMRC explaining your error and informing them that you are non-resident. They may well then ask you to complete SA 109 "Residence etc" Pages.


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