Foreign tax refund

Hello, I am a UK tax resident, use cash basis accounting, have trading/employment/investment income. My salary came from foreign employment and was taxed at source in the foreign country in 2019, 2020. I claimed FTCR as per the DTA for these on my UK tax returns. In 2023 I unexpectedly found that I was due a refund of some of that withheld foreign tax. The deadline to amend my 2019 and 2020 UK returns has now lapsed, do I add this refund to my current return? Do I report amounts due (as per the calculation on the foreign tax return) or the actual received refunds, foreign tax returns were submitted late and there is no guarantee I will get a full refund due to timing. Also will I have to pay a penalty + interests calculated from 2019, 2020 for the respective due/refunded tax amounts? Can you please provide me with a link to a related guidance/legislation. Thank you

Hi,

No you cannot add this to a 2022 to 2023 tax return. Each tax year needs to be looked at separately. Although it is too late to amend your 2019 to 2020 tax return, you can still claim, in writing, 'overpayment relief' for 2019 to 2020, up to 5 April 2024.  

Please follw the guidance below to ensure you use the correct formatting for claiming overpayment relief.

SACM12150 - Overpayment relief: Form of claims

Thank you.

Hello, Thanks for your reply and for the link to the relevant info. To clarify - does the 'overpayment relief' claim apply to underpayment of tax cases? I actually owe tax to HMRC as I deducted the full amount of foreign withheld tax from my total tax liability, so the refunded amount is what I'll have to pay to HMRC for both 2019 and 2020. I am not claiming an overpayment of tax. Thank you

Hi,

All we would require is a letter from you advising that there is an underpayment of tax as the wrong amount of foreign tax credit was claimed and the tax year that it referes to.  

If the tax return is an indate return, 2021/22 and 2022/23, we can amend the tax return for you. You can also amend those tax returns yourself, by logging into your personal tax account and selecting the appropriate tax return.  

For tax returns that are older than 2021/22 and 2022/23, we can recalculate your tax liability and issue a discovery assessment to request the extra tax due.

Thank you.