Do you know how to declare foreign employment Income on the Tax Return for individuals in resident in the United Kingdom?
We have prepared detailed instructions for you on how to do this.
Firstly, determine which country the person is resident in for tax purposes. A tax residency test must be carried out to conclude the tax residency of an individual.
If the individual is regarded as a UK resident for tax purposes, then the person must declare his/her global income in the UK.
If the person has undertaken any employment in a foreign country, he/she needs to declare it in the UK through a tax return known as a self-assessment return.
On the self-Assessment Tax Return, a supplementary page called SA102 (Employment page) must be completed with all detail of the foreign employment.
While completing the employment page (SA102), on box number 4, the letter ‘F’ must be written instead of the PAYE reference number.
If there was any tax paid on the employment in the foreign country, please do not include it on SA102. Leave the UK tax taken of Box blank.
To declare foreign tax paid and claim the relevant tax relief on foreign employment, supplementary page SA106 must be completed.
On BTC software, foreign tax paid on employment, self-employment, and other income on tab Foreign (IV) under foreign section must be ticked.
In that section complete all detail of foreign income and associated tax paid. i.e., date when employment was ended / tax year ended, description of the nature of income, country, Foreign Tax Paid, Taxable Amount. Claim foreign tax relief box must be ticked if tax relief is sought. Please ensure the relevant section of the Double Taxation Agreement (DTA) between the UK and the foreign country is reviewed and held on record as evidence to support the claim.
If an individual has one or more foreign tax credit claims in the tax return, the total amount of foreign tax credit claim must be entered on Box 2 of tab Foreign (I) under foreign section on BTC Software.
On the paper-based tax return it will be section 2 of Page 1 of supplementary page SA106.
- In addition to this, detail of where exactly the foreign employment income has been declared on the tax return must be provided on SA100-finishing your Tax Return page under box 19 titled ‘Any Other Information.’
- If there were no foreign tax paid on foreign employment income, then there is no need to include SA106 otherwise known as foreign income section on the Tax Return.
We hope that with this article we have dispelled any doubts you may have about how to declare income from working abroad on your UK personal tax return.
Justyna Witkowska
Cartwheel International
