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Posted Mon, 09 Jan 2023 00:20:18 GMT by Jay_c Chow
I am eligible for split year and the start date of the UK part is 30 May 2022. My employment annual bonus was paid in Aug 2022, for performance period of 12 months from 1 Jul 2021 to 30 Jun 2022 I continue to work for my Hong Kong-based employer after moving to the UK, and my salary and bonus are paid to my Hong Kong bank account. Should I declare my bonus in full amount? Or time-apportioned?
Posted Thu, 12 Jan 2023 14:51:57 GMT by HMRC Admin 5

HMRC taxes income on the 'arising' basis.  

Although this bonus is based on performance of the previous year, it is paid to you in 2022 to 2023 tax year, so should be included in 2022 to 2023 tax return.

Thank you.
Posted Fri, 13 Jan 2023 18:20:58 GMT by Jay_c Chow
Hi, My question is, from the perspective of 2022 to 2023 tax return, should I declare the amount of bonus in full amount or time-apportioned? The performance bonus covered 11 months before the start date of UK part and covered 1 month after the start date of UK part. If the bonus received is 12k GBP, is it correct to declare 1k GBP for the year 2022 to 2023? Thank you.
Posted Tue, 17 Jan 2023 15:19:07 GMT by HMRC Admin 17

Please note that the receipts basis of assessment applies to all general earnings.

This means that the full amount of the bonus should be reported in your 2023 tax return. 

See Link:

Employment Income Manual  .

Thank you.
Posted Sat, 21 Jan 2023 00:18:34 GMT by Jay_c Chow
Hi, In the situation that bonus is paid based on the performance period spans two tax years, and part of the performance period is related to job performed overseas. Does EIM40012 apply to attribute the bonus into 2 tax years accordingly? Assume I don't elect split-year treatment in self-assessment. Reference from EIM40012 (para. 4/5): If the performance period spans more than one tax year, Section 16(4) ITEPA 2003 applies. The bonus should be apportioned to the relevant tax years on the basis of a just and reasonable apportionment. Section 16 attributes general earnings to one or more tax years. Thank you.
Posted Tue, 24 Jan 2023 12:54:58 GMT by HMRC Admin 17

EIM40012 advises that "Unless there is evidence to the contrary, HMRC takes the view that performance bonuses are “for” the performance period.

This may be a calendar year or the company accounting period. In the case of specific projects, it may be the period
beginning on the date when work started and ending when the specified outcomes were achieved". 

If the performance period is two years, then the bonus can be treated as taxable over the two years .

Thank you.

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