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Posted Mon, 18 Dec 2023 18:58:39 GMT by
Hi I'm tax resident in the UK and am employed and paid by a UK employer. My tax on this UK income gets paid to HMRC in the usual manner through PAYE. However, I generally work remotely two days per week in Belgium, and so am liable to pay tax in Belgium for these remote working days. Under the double taxation agreement I understand that I can claim back from HMRC the tax (that I have already paid under PAYE) paid in Belgium on the same income. However, given the alignment of the tax years, I haven't actually yet paid the tax in Belgium, although I will need to do so in due course. How should I enter this in my self assessment? I have calculated the reduction in my UK tax liability based on days worked. Is it sufficient just to enter this amount in the 'Foreign tax credit relief against UK Income Tax: (optional)' box?
Posted Tue, 19 Dec 2023 16:35:48 GMT by HMRC Admin 10
Hi
As this is not actually foreign income for you to claim foreign tax credit relief, you should be looking to Belgium to claim the refund from them. You should still declare the full UK income in the return as you are UK tax resident.
Posted Wed, 20 Dec 2023 11:17:34 GMT by
Thanks for the response. I think perhaps I didn't articulate the situation well enough. I have spent more than 183 days in Belgium, so under Article 15 of the double taxation agreement between the UK and Belgium (https://assets.publishing.service.gov.uk/media/5e15edb3ed915d3b0a02670e/Belgium_dtc_Jan_2020.pdf) some of the tax that I have already paid to HMRC through PAYE was not actually owed to HMRC as the work leading to the taxed income was physically carried out in Belgium (remote working), and instead will be owed to the Belgian tax authorities. I'm therefore looking to get a refund from HMRC for that tax that I have overpaid (under the double tax treaty) to HMRC. Given the above, how should this be entered into the self assessment? As noted above, I have calculated the reduction in my UK tax liability based on days worked. Is it sufficient just to enter this amount in the 'Foreign tax credit relief against UK Income Tax: (optional)' box? Thanks
Posted Tue, 02 Jan 2024 10:13:18 GMT by HMRC Admin 2
Hi,

As you are out of the UK for more than 183 days, you would not be UK tax resident for the year and will therefore need to complete the residence section of the tax return.

You will not claim foreign tax credit relief for the Belgian tax but reduce the UK income that is taxable by completing the addtional information section of the return.

You can find guidance, in particular the reference to box 12, here:

Additional information notes

Thank you.

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