Foreign income?

Hi, I am a UK tax payer and mostly work as an employee in the UK. I also do some work on a freelance basis for a Belgium-based company, although I do all of this work from home in the UK. This amounts to just under GBP3,000 equivalent. No tax is deducted over this. Some of this was paid out to my UK bank account in GBP (remitted?) while the rest was paid out in EUR to a Belgian based bank (so not remitted?). I'm in the process of completing my self-assessment. I've currently declared the full amount I earned from self-employment in SA103F (my turnover), and I have indicated that "My business is carried on abroad" (Self Employed short 10 - Business is carried on abroad). QUESTION 1: so far, is this correct? Should I indicate that my business is carried on abroad? QUESTION 2: If "Yes" to QUESTION 1, then what "type of income or gain" do I indicate in SA106? This just seems to be about savings and dividends etc, and the only self-employment option concerns "self-employment I've paid foreign tax on", which I haven't. Grateful for your advice.

Hi

Your proposed SA103 entries would be correct. No SA106  entries would be required, as you are not claiming Foreign Tax Credit Relief.

Thank you

Hello, thanks for the clarification. A follow up question, as I think there is some conflicting information or perhaps I don't fully understand: Having (correctly) completed SA103 as stated above (online), the online form then makes me complete SA106 and asks me: "Were you unable to transfer some or all of your overseas income to the UK?" I select NO because I wasn't unable to, I just choose to keep it on an overseas account. It then forces me to fill in SA106 "Which of the following types of income or gain did you receive from overseas sources?". I HAVE to select from this list which options apply: not selecting anything throws an error and the form will not progress. However, none of the answer options in this question really apply to me, having gained some income through self-employment that has not been taxed. Grateful for advice on how to proceed. Is this a form error, or should I maybe select "Any other overseas income and gains" (although none of the provided examples seem to suggest I should tick this)?

Hi EP,
As you have completed the SA103, you then declare it on the foreign page as self employment in order to claim the foreign tax credit relief.
Thank you.

Hello! Thank you for your response. I'm afraid it doesn't answer my question. A recap: I do not want to claim foreign tax credit relief: I did not pay foreign tax. I got a small amount in Euros (equivalent to just under £3,000) from self-employment. Some of this was paid out into my UK account (remitted) and some to an account in the EU (Belgium, so not remitted). When I state in the online SA103 form that "My business is carried on abroad", I then HAVE to fill in SA106 "Which of the following types of income or gain did you receive from overseas sources?". ALL of the options provided do not apply to me, as they all relate to things like savings and dividend (not relevant), or self-employment on which foreign tax was paid on (also not relevant: I did not pay foreign tax). Either myself or the form is missing something here, which one is it?!: a) I should not fill in SA103 to say "My business is carried on abroad". If this is the case, how then do I indicate that some of my income was gained abroad? b) SA106 should have a correct option for self-employment on which no foreign tax was paid. Or maybe there is something else. Is there any further advice you can provide please? Thanks in advance.

Hi EP, 
As no foreign tax was paid, you will declare all the income as self employment. any of the foreign earnings remitted must be declared in sterling.
If claiming the remittance basis, you also need to complete the residence section to confirm this and you will need to use 3rd party software for this.
You should mention at the additional information section that the foreign income has been declared as UK self employment.
Thank you.

Hi there, I'm in a similar situation to EP - working freelance, I've earned income from a private foreign individual, which has been paid directly into my GBP account. No foreign tax has been paid on this income. Aside from the fact my client lives in another country, there are no special circumstances surrounding this income; it's otherwise regular business income that I have reported in my self-assessment. I work from my home in the UK, so I have not checked "My business is carried on abroad". Is this correct? I have the same question about SA106 with regards to income from overseas; none of the options seem to apply to me, other than perhaps "Any other overseas income and gains". Is it correct to select this? Thanks!

Hi
This is foreign self employment income.  You would include it with your gross turnover, in the self assessment sections, along with your expenes.
 

Hello, Thanks for responding. I have included it in my gross turnover as self employment income, yes. Separately to that, I'm asking about how to appropriately respond in the foreign income section, as none of the options seem to apply in this case. Using the online checker tool, I've been told "You need to tell HMRC about your foreign income", but I don't see which box applies in this case. Additionally, should I check "My business is carried on abroad" in this case? It's unclear to me exactly what counts as "carried on abroad" Thanks again in advance

Hi,

You only need to show it on the foreign section if foreign tax has been deducted so that you can claim Foreign Tax Credit Relief.

If no tax paid, then you just show it as a self employment source. You need to tailor your return at section 3 and answer yes to was your turnover over £1000 and it then asks how many business, say one.

Thank you.

I have an identical situation to GJ. Please help.

Hi Joe22,

This is foreign self employment income. You would include it with your gross turnover, in the self assessment sections, along with your expenes.

Thank you.