Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Tue, 19 Mar 2024 13:52:35 GMT by hlvrn
When I completed my self assessment in January, I entered the tax I had already paid in a foreign country for foreign income. The foreign tax paid was automatically deducted from the total amount of income payable here in the UK. However, the total amount of foreign income was still included as taxable income here in the UK. According to the double taxation treaty which is applicable - no tax shall at all be applied for the income which is already taxed abroad. By including my foreign income (minus foreign tax), the foreign income is used twice to calculate tax. Once in the UK, and once abroad. So as an example... Foreign tax: Foreign income $1000 Tax paid abroad $200 UK self-assessment: Foreign income $800 (1000-200) Additional tax paid in the UK $150 Is this standard practice by the HMRC? I have been taxed twice which I don't think is correct. Tax paid under the UK self-assessment should be $0. When can I expect a refund? Do I have to contact the HMRC to refund according to the double taxation treaty? Or can I expect that they handle all of this themselves, without me telling them to do so? It would be really helpful for others as well, if the HMRC guidance regarding foreign taxation is updated to clarify this issue.
Posted Fri, 22 Mar 2024 15:51:33 GMT by HMRC Admin 20 Response
Hi hlvrn,
If you are UK resident and domicile, you are liable on your worldwide income and you need to declare the foreign income unless the terms of the double taxation treaty state that it is only taxable in that country.
You can then claim foreign tax credit relief for the tax paid abroad to reduce your UK liability. you should therefore contact us on 0300 200 3310 to ensure you have completed your return correctly.
Thank you.
Posted Tue, 09 Apr 2024 12:31:59 GMT by hlvrn
I have tried calling HMRC several times now and the call keeps getting cut off, after waiting for 30-40 min. I therefore give up on calling, and will write HMRC a formal letter. It is extremely disappointing to be forced to communicate with tax authorities in methods that are centuries old.

You must be signed in to post in this forum.