Consultancy business for a HK company

I work by myself to provide consultancy services my client which is a Hong Kong company. The tax year 2021/22, I got GBP 24,000 earnings from them. I know I need to file self assessment tax return to declare this income tax and pay for National income contributions, but do I need to fill out SA106 “foreign” (as I suppose it relates to foreign earnings ) and SA109 “residence, remittance basis” (if I think I can apply for remittance basis as long as I didn’t remit the income from HK to UK)? One more question, if I am regarded as self-employed, I can get trade allowance of 1,000GBP, plus perineal allowance of 12,570 GBP , plus marriage allowance if my spouse didn’t have income during the tax year 2021/22 ? So altogether I can get three different allowances , right ?

Dear HMCR Admin, I would be grateful if you could reply to me so that I can file a self-assessment tax return. Thanks very much.

Hi
If you are resident but non domociled to the UK then you could claim remittance basis on this income if you do not send the funds to the UK.
In order to do this you must complete the SA109.
Also with regards to the query on allowances, yes it is possible to claim Personal Allowance, Self Employed Allowance and Marriage Allowance in the one year.
Thankyou.
Regards.

Thank you, sorry but one more follow-up question, if i started for this consultancy service for the HK company on 7 June 2021(the first day I entered to UK), so from 06 April 2021 to 06 June 2021 , I have income earnings from employment with another HK company. For self assessment tax return, do I need to include the income earnings from 06 Apr 2021 to 06 June 2021 ? This earning is from my employment in HK, start on 7 June , I am self employed to offer consultancy services. So that is two parts of earnings during tax year 2021/22 , can you guide me how to declare income appropriately? Thanks.

Hi,

Any foreign earnings received while being UK tax resident needs to be reported to the UK.

The employment income would be entered on the employment page and the self-employment would be entered on the self-employment page.

Any tax paid on either would  be entered on the foreign section of the return and a claim made for foreign tax credit relief. 

Thank you.

Hi, That means, from 6 April 2021 to 6 June 2021 (the period of income earning from employment in HK before I enter into the UK), I need to fill in SA100 to report this income from employment. Then, I should fill in SA103S “self employed” for the period of income earnings during 07 June 2021 to 05 Apr 2022. Then, if I want to claim for remittance basis, I fill in SA109 for those unremitted funds to the UK. Further question, Do I need to declare on the additional information page, saying that from 6 April 2021 to 6 June 2021, this should not be taxable because this is income before I enter into the UK?

Hi,
 

Please see Self Assessment notes for the SA109.  Box 28 onwards advises on how to claim under the remitance basis: Residence, remittance basis etc notes   .   If you claim under the remitance basis then we would not expect you to declare your earnings abroad.  If you became Self Employed when arriving in the UK then yes you would complete SA103 for that period.

Thank you.

Hi admin, If I fill in SA109 for earnings of income (consultancy service for a HK company) from Hong Kong, I don’t need to be taxed for that income if not remit to the UK, but then you said I need to fill in SA103 self employed page too, then the same source of income will be double declaring, and the self employment on SA103 will be taxable, so if both SA109 and SA103 are filled, it seems contradiction, please advise, thanks.

Hi,

The SA109 would be completed if you are using the remittance basis for your HK earnings. You would complete the SA103 if the earnings arose from self employment in the UK and not from abroad. 

Thank you.

If I fill out SA103 to declare self employment income of GBP 24,000 in the tax year 2021-22 , and apply for trade allowance of GBP 1,000, personal allowance of GBP 12,570, and my spouse did not have work and can transfer some allowance of GBP 1,000 , so the taxable income should be : GBP 9,430 Then I fill in SA109 to claim for remittance basis, and all GBP 24,000 did not remit to UK, so I don’t need to pay tax on this. My question is , am I need to pay 20% tax band of GBP 9,430 taxable income ?

Hi
If your uk income falls within the basic rate band you will pay tax on anything over your tax allowances at 20% or 21% if you live in Scotland. 
Thankyou.
Regards.

Hi, I work by myself to provide consultancy services to my client which is a Hong Kong company. For the tax year 2021/22, I got GBP 24,000 earnings from them. Regarding to the above situation, GBP 24,000 is considered as "foreign income" and at the same time, this amount is also my self-employed earnings, and also, I need to claim for remittance basis on this amount for not remitting to the UK. My questions are: (1) Except filling in SA100, do I need to fill it SA103S (short version), SA106 and SA109 form ALL these supplementary forms? (2) Do I need to pay for National Insurance? If yes, how to go through PAYE or DPNI scheme? Thank you,

Hi
If this is classesd as self employment income then this will be entered on the SA103 with the SA106 only being compeleted if tax has already been deducted and you are looking to claim foreign tax credit relief.
Relief for foreign tax paid (Self Assessment helpsheet HS263)
If this is employment income then this will be entered on the SA102, again with the SA106 only being completed if tax has been deducted at source.
The SA109 only gets completed if you are claiming the remittance basis, which is a personal choice if you meet the qualifying conditions.
Further guidance can be found here:
www.gov.uk/government/publications/residence-domicile-and-remittance-basis-rules-uk-tax-liability
If the income is self emplyoed, then national insurance will be automatically calculated.
If this is employment you will need to speak to the National Insurance office for further information on how to pay if not run through a Uk payroll. A DPNI scheme is also optional but further guidance can be found here :
www.gov.uk/hmrc-internal-manuals/paye-manual/paye20100
Thankyou.
Regards.

If those income is classed as “foreign income” and report on SA106 page, even the nature of those foreign income is by self employed, do I still need to report the same income earnings on SA103 “self employed”, I think it’s repeated reporting same income amount. In this case, I should decide whether the income earning goes to “foreign income” section or “self employment” section. And I decided to claim for remittance basis, so suppose I must declare these income under foreign income to allow me to claim for Remittance basis. So therefore, under this logic, should I still report under self employed IF I don’t have any other work except this?

Hi
You need to declare the income in both the self employed page and the foreign income page if you are claiming foreign tax credit relief.
This is to show the type of income the foreign tax has been deducted against.
It does not duplicate the income in the calculation.
Thankyou.
Regards.

Hi, If I do not need to claim any foreign tax credit relief (as I know I don't need to pay tax in the HK side, then I also need to fill in the self-employed page? Or do I just need to report my foreign income on the foreign income page? (I want to claim for Remittance Basis)

Hi,

You need to fill in the self employment page, so that the income is taken into account in your calculation.

Thank you.