Paying UK tax working remotely abroad (Ukrainian company)

I'm in UK under the "Homes for Ukraine" scheme. I work in Ukrainian company remotely and pay all taxes in Ukraine. Do I need to pay taxes in UK, if UK and Ukraine have a valid agreement about double taxation? Thanks

Hi
You would need to review the guidance on residence and remittance guidance and apply the tests.
If you are considered resident for the full tax year, then you wil need to declare your foriegn earnings brough into the UK and claim tax relief for the foreign tax paid.
If you are not considered resident for the full tax year, then you would only declare the income brough into the UK from the date you arrive in the UK and claim tax relief on the foreign tax paid from the date you arrived.
Residence, domicile and the remittance basis: RDR1
Thankyou.
Regards.

Hello, I have a similar question, and I need assistance. I'm in UK under the "Homes for Ukraine" scheme. I am here for 163 days so far. The thing is I am still working remotely for my company, but it is not based in Ukraine, it is in the United States. In Ukraine I have a status of self-employed enterpreneur, and I've been paying taxes to Urkaine every month. I badly need guidance what to do next.

Hi,

You should check the residence, domicile and remttance guidance to see if you are considered resident in the UK.

Residence, domicile and the remittance basis: RDR1

If you work for yourself, rather than being employed by a company, then you will be self employed. If you are, you will need to register as self employed.

Set up as a sole trader 

This will register you for Self Assessment and National Insurance contributions. Your business profits will be considered foreign income. This will be shown on the self employment section of the online return or SA103 supplementary page.

If you have paid any tax on this foreign income, you will also need to declare it in the foreign section or SA106 and claim a foreign tax credit relief of up to 100% of the tax paid.  

File your Self Assessment tax return online

Thank you.

I am Ukrainian who moved to UK in 2022 (Ukrainian scheme). I want to know wether I can be considered as non dom and what is the procedure to claim this status. My parents had never been living in UK and are not British. I have my house in Ukraine. My questions: 1.Is there any annual fees for being non dom for the first 7 years (remittance basis) if not to bring any money to the Uk. 2. Do I need to pay any tax from my foreign income if I don’t bring this money to the UK 3. Do I need to fill in tax return if I am non dom resident who has foreign income but does not bring any money to UK during the year 4. Shall I apply in advance for non dom status ? How to require this status? 5. Shall I declare all my income , property , bank accounts outside UK if I am UK resident , non dom 6. If I have account abroad with some savings is this savings taxed if non dom. 7. If domicile resident has savings in foreign bank is this money taxed, if yes, what is the tax? Thank you

Hi,

If you are considered resident, but not domiciled in the UK, you can choose to use the remittance basis, instead of the arising basis. The arising basis means you will be taxable on your worldwide income in the UK, in the tax year that it arises. The remittance basis means that any income and, or gains generated outside the UK, while you are resident in the UK and that income and gains is not remitted to the UK, is not taxable in the UK in that tax year. If you later bring that income and, or gains to the UK, it becomes taxable in the tax year it is remitted. You only pay tax on your UK earnings.

For the first 7 years, there is no cost to using the remittance basis, other than losing the personal allowance and being taxed on your UK earnings and, or gains. If you are resident for 7 of the past 9 years, there is a £30000 charge and the loss of personal allowances and annual exempt allowance, as well as being taxed on your UK income and, or gains.  

If you are resident for 12 of the past 14 years, there is a £60000 charge and the loss of personal allowances, as well as being taxed on your UK income and, or gains. Where you are resident for 16 years or more, you are deemed resident and can no longer use the remittance basis.

You cannot apply in advance for the remittance basis, only by completing a tax return, can you claim remittance basis for the tax year.  A tax return is required if you are declaring any foreign income and, or gains or the remittance basis.  

To claim the remittance basis, requires the completion of a Self Assessment tax return for each year that the remittance basis is being used. To do this online, requires the purchase of 3rd party commercial software. Tax returns can also be submitted on paper. The residence supplementary page is SA109.

File your Self Assessment tax return online

Using the arising basis would still require the completion of a Self Assessment tax return to declare your foreign income and, or gains.

You will need to review the following guidance at RDR1 to check your residence status and if you can use the remittance basis. If you are eligible to use the remittance basis, then you would only declare the income remitted to the UK.
There is an exemption for small amounts of foreign income remitted to the UK. The guidance at RDR1 9.11 below provides information on this. 

Guidance note for residence, domicile and the remittance basis: RDR1

A person who is resident and domiciled or deemed domiciled, is taxed on the arising basis on their worldwide income generated in that tax year.

Where a foreign tax is paid on this income, a Foreign Tax Credit Relief can be claimed.  

Foreign interest and dividends are treated in the same way as UK interest or dividends and are entitled to the appropriate tax relief.

Thank you.

Many thanks for comprehensive reply. If a UK resident, who is non domicile is renting his own property based overseas in Ukraine and paying taxes in Ukraine and is self employed in Ukraine. 1. Is this income deemed as foreign income even if UK resident is physically based in UK. 2. Is it possible to claim remittance basis to which resident is eligible to this type of income 3. If no money is remitted to the UK during a year is it necessary to fill in tax return if the foreign income is higher than 2000 pounds but not remitted Many thanks for your help

Hi,

As a UK resident, yes, this will be classed as foreign income.

For details on what you can claim on the remittance basis, please refer to the guidance here:

Remittance basis 2022 (HS264)

Thank you.

Many thanks for your answer. I still did not find answer in the link on these questions If a UK resident, who is non domicile is renting his own property based overseas in Ukraine and paying taxes in Ukraine and is self employed in Ukraine. 1. Is it possible to claim remittance basis to which resident is eligible to this type of income. 2. if no money is remitted to the UK during a year is it necessary to fill in tax return if the foreign income is higher than 2000 pounds but not remitted. 3. If physically I am based in UK, but income is generated in Ukraine , do I need to be solo trader in UK if all my activity (apartments I rent are located in Ukraine) Many thanks for your help

Hi AnnaSolovina Solovina,

As a resident, non domiciled individual, you can elect to use the remittance basis, instead of the arising basis.  

You lose your personal allowance and pay tax only on your UK income, but still declare the unremitted income on your Self Assessment Tax return.  

Guidance on using the remittance basis can be found  here:

Residence, domicile and the remittance basis: RDR1

Should you ever bring the unremitted income into the UK, then it becomes taxable in the tax year your bring it in to the UK.

Thank you. 

Hello, thank you for your help. I am resident, non domicile. 1. Can I claim remittance basis to any foreign business activity? 2. If physically I am based in UK, but income is generated in Ukraine , do I need to be solo trader in UK if all my activity (apartments I rent are located in Ukraine), or it’s not required to register solo trader in UK if business activity is overseas?

Hi,

Please refer to guidance here.

Remittance basis 2022 (HS264)

Thank you.

Thank you for reply but I did not find answer on my questions there, can you pls help me. I am resident, non domicile. 1. Can I claim remittance basis to ANY foreign business activity if as an example I run hotel business in Ukraine but I live in UK? 2. If physically I am based in UK, but income is generated in Ukraine , do I need to be solo trader in UK if all my activity (apartments I rent are located in Ukraine), or it’s not required to register solo trader in UK if business activity is overseas?

Hello, I am Ukrainian who moved in the UK in feb2023. I checked that I am not a UK resident for 6.apr 2022-5.apr 2023 tax year. Also I am registered as ukrainian sole-trader (private entrepreneur), In the UK I continued to work remotedly abroad. As far as I understand I have to register as UK sole trader. If so should I make self assesment for income which I earned working remotedly abroad from the UK from feb 2023 to 5 apr? Or maybe I should declare income that I brought into the UK during this period? Will I get personal allowance ? Thanks.

Hello AnnaSolovina Solovina,

Under the Resident, non domiciled rules, an foreign income not remitted to the UK, is not taxable in the UK.  

If the income is remitted to the UK in a later tax year, then it becomes taxable in the UK in that later tax year.  

You can find guidance at Remittance basis 2022 (HS264).

Thank you.

Hi Oleksii Heller,
You will need to register for self assessment, using the option for self employment, for 2023/2024 tax year:
Register for Self Assessment
This will allow you to register for class 2 NIC.  
Your foreign self employment income will need to be converted to pounds sterling and reported on the self employment page of the tax return.  
If you’re claiming Foreign Tax Credit Relief on income included elsewhere in your tax return, fill in SA106 and say in the ‘Any other information’ box (on page TR 7)
where on your tax return this income is included. The country or territory codes are shown in the ‘Foreign notes’.
Make sure that the foreign tax being claimed is the ‘minimum’ due under the laws of the foreign country after all deductions, exemptions, reliefs and allowances have been claimed.
Thank you.

Thank you for your reply. I have a question, if I am a self employed outside the UK but I am UK resident , non domicile, who is permanently living in the UK and managing my self employed business which is based outside the UK, can I claim remittance basis on this income and not to pay tax on it if not to bring to the UK? When I fill in tax return , do I have to declare only the amount of income remitted to the UK or full amount of foreign tax earned from my self employed foreign income? Thank you for reply

Hi,

Please refer to guidance at:

Paying tax on the remittance basis (Self Assessment helpsheet HS264)

Thank you.