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Posted Tue, 23 Jan 2024 00:08:17 GMT by
Hoping for some help with an issue that I've been struggling with for the Self Assessment. The US tax year is 1 January to 31 December 2022 and then 1 January to 31 December 2023. The UK tax year is 6 April 2022 to 5 April 2023. When I filled in my US tax return for 2022, I owed some tax, which I paid in a lump sum within the UK 2022/23 tax year. This happens to a lot of US taxpayers. The question I have is: regarding the foreign income section of the self assessment, how do I know how much of what I owed in US tax that I paid in a lump sum represented what was underpaid specifically during the UK tax year of 6 April 2022 to 5 April 2023? Because surely some of it represented tax that was underpaid from 1 January to 5 April 2022 and some of it from 6 April 2022 to 31 December 2022? Is it just proportionate to the amount extra paid? So say if it was $X owed in taxes and 271 days of the UK 2022-23 tax year lie in the 2022 US tax year, is it just 271/365 of $X? And if so, what month for the currency conversion do you use to report that in pounds? Is it just the conversion at the time you paid the lump sum, or, if it is proportionate to 271 days, do you calculate the appropriate conversion rate for each day of the year? Any guidance would be appreciated. Thank you.
Posted Thu, 25 Jan 2024 11:44:59 GMT by
Any help with this matter would be really appreciated. Thanks!
Posted Thu, 25 Jan 2024 15:46:54 GMT by HMRC Admin 25
Hi ilk0101,
You take the figures for the tax year 1 Jan to 31 Dec 22 and put into your 22/23 tax return and 1 Jan to 31 Dec 23 into your 23/24 tax return and so on.
There is no need to apportion the US figures to fit the UK financial year.
You claim a credit again the chargeable UK tax, of up to 100% of any overseas tax paid.
HMRC cannot advise you on the tax payable in the USA in a US tax year, for that you will need to contact the IRS.
Any overpayment or underpayment of US tax will need to be addressed by the IRS, which should allow you to declare the correct tax figure in your Self Assessment tax return.
Thank you.

Posted Thu, 25 Jan 2024 22:31:08 GMT by
Thank you for your help. I really appreciate your time, although I admit I am still a little confused. Just to clarify- when you say 'figures', does that mean that in my 22/23 UK tax return, I should include all of the gross income received in the USA during 2022, including from 1 Jan to 5 April 22, even though that money wasn't actually earned or received in the 22/23 UK tax year? Or are you only talking about the tax which was paid in the 1 Jan to 31 Dec 22 USA tax year? Thank you!
Posted Tue, 30 Jan 2024 11:38:32 GMT by HMRC Admin 19

The income received in the tax year 1 January to 31 December in the US, is treated as being the income received 6 April to 5 April. This means you do not need to apportion to try and match the UK tax year.  

Under the terms of Self Assessment, we do not provide an official exchange rate and the onus is on the individual to use a just and reasonable exchange rate. For your convenience, there are exchange rates here:

Exchange rates from HMRC in CSV and XML format

You can see older rates here:

Foreign exchange rates and spot rates: 1 January 1989 to 31 March 2009

You are free to use any of the supplied rates or one of your own choosing. 

Thank you.

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