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Posted Tue, 14 Nov 2023 12:53:02 GMT by Nikita Belyakov
Hi HMRC team, Hope all is good! I live in UK, I'm UK tax resident. At the same time I'm doing business (Sole Trader) outside the UK. My business nature are mobile apps. We import & export digital services (only to B2B counterparts and all of them non-UK). The turnover last tax year was higher than £85k. My questions are: 1) When doing self-assessment, should I declare this as Self-Employed OR foreign income? 2) Do I need to register for VAT or pay VAT? (considering it's B2B services all outside the UK). 3) Should I pay tax on NET PROFIT (which was left on bank account after all expenses on the last day of tax year, namely 5th April. Overall left balance) Many thanks
Posted Tue, 14 Nov 2023 14:12:54 GMT by HMRC Admin 17

Hi ,
When completing your self assessment tax return, you will need to use SA103F. 

You should add your foreign income (after converting to sterling) to your self employment gross profit
(it's still part of your self employment business) as well as the expenses. 

If you paid overseas tax then you also need to declare the overseas gross income and tax paid on SA106. 

You can claim a credit for the overseas tax paid.

Yes, you will need to register for VAT :

Register for VAT  .
This would depend on what your accounting period is .

Thank you .
Posted Tue, 14 Nov 2023 14:33:12 GMT by Nikita Belyakov
Thanks for your reply! As for VAT: I understand that need to register for VAT, but what about VAT tax payment in my case? (B2B services, import & export towards non-UK companies). I mean based on the rule "place of supply" the exported services may be not subject to VAT, while importing services may be subject to Reverse VAT. As for accounting period: for the Sole Trader business entity in that country I have it - it's regular calendar year. However in UK it's 5-6 April, so I believe that NET profit left on 5th april should be declared as NET PROFIT for self assessement? Many thanks
Posted Wed, 15 Nov 2023 11:38:36 GMT by HMRC Admin 19

If you are in the UK and supplying digital services to other businesses and these businesses are all outside the UK then these supplies would be outside the scope of VAT and there would be no obligation to register for VAT.

You can register for VAT in the UK voluntarily however.

You can see guidance here:

Working out whether you need to register

The place of supply of digital services

For Self Assessment, yes, it must be for the UK tax year. you will also need to amend your accounting period going forward for Making Tax Digital. You can see guidance here:

Making Tax Digital for Income Tax

Thank you.

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