As millions scramble to meet the January 31 self-assessment tax deadline, HMRC has warned people to check if they might get double the tax on their income if they miss the date.
The Government body has released some helpful advice for people who might have an income from abroad to avoid being taxed both in the UK and in the foreign nation.
In the video below, HMRC explained that anyone concerned about the issue should visit the section of their website under “if you’re taxed twice”.
On there it explains: “You may be taxed on your foreign income by the UK and by the country where your income is from.
“You can usually claim tax relief to get some or all of this tax back. How you claim depends on whether your foreign income has already been taxed.”
The website explains those who are at risk of being taxed double, can apply for “tax relief” in the country your income’s from if; the income is exempt from foreign tax but is taxed in the UK (for example, most pensions), or, required by that country’s double-taxation agreement.
Being a tax issue, there are of course forms to fill in, and HMRC said it might be advisable to speak to both the foreign tax authority, it added that if applying in the UK “you must prove you’re eligible for tax relief by either:
- Completing the form and sending it to HM Revenue and Customs (HMRC) – they’ll confirm whether you’re resident and send the form back to you
- Including a UK certificate of residence, if you’re applying by letter
For those who have already paid tax on their income abroad, HMRC advise: “You can usually claim Foreign Tax Credit Relief when you report your overseas income in your tax return.
“How much relief you get depends on the UK’s ‘double-taxation agreement’ with the country your income’s from.
“You usually still get relief even if there is not an agreement, unless the foreign tax does not correspond to UK Income Tax or Capital Gains Tax.”
“You may not get back the full amount of foreign tax you paid. You get back less if either, a smaller amount is set by the country’s double-taxation agreement, or, the income would have been taxed at a lower rate in the UK.”
For more information visit the HMRC website here.
