HOW TO REPORT EMPLOYMENT INCOME EARNED ABROAD ON A SELF ASSESSMENT TAX RETURN FORM
Your Tax Shop in Tameside advise that you initially need to determine your residency status for the tax year in question. This is decided using the ‘Statutory Residence test’. Assuming you were working abroad for 4 months, you would therefore have been resident in the UK for more than 183 days and as a result considered to be a UK resident for tax purposes. You would consequently need to pay tax in the UK on all worldwide income within the tax year.
To declare your foreign employment income, you will need to complete the ‘Employment’ pages of the Self-Assessment Tax Return (SATR), which is SA102. You’ll need to fill in a separate ‘Employment’ page for each job, directorship or office held within that tax year. One of Your Tax Shop’s experienced team can help with this.
If your foreign employment income was taxed abroad, you DO NOT include the tax paid on the SA102. You need to complete the ‘Foreign’ pages of the SATR (SA106). On page F6, there is a section titled: Foreign tax paid on employment, self-employment and other income. As well, as this section, you need to include details in the ‘Any other information’ box (on page TR 7) of where on your tax return this income is included (in this case, the ‘employment’ pages). This will then create a Foreign Tax Credit, which can be used to reduce any UK tax payable on the same employment income.
If no foreign tax was suffered, you do not need to complete the ‘Foreign’ pages.
If you were non-resident, then you do not need to include any foreign employment income on your UK SATR.
Finally, if you qualified for split-year treatment, you only need to include the foreign income earned in the UK part of the year.
Should you need any further information regarding foreign income then please contact one of the team at Your Tax Shop based in Ashton under Lyne on 0161 3395689.