Are you a Brit living overseas who needs to file a Self Assessment tax return?

When you leave the UK, you can leave behind many things you don’t like. The cold, wet, British weather is top of many people’s list. But one thing you may not be able to leave behind is the need to pay UK tax. So, what income can be subject to UK tax when you live overseas and how do you report it? 

What does “non-resident” mean?

If you’re “non-resident”, no UK tax is payable on income or gains that you earn in the country overseas where you live. Tax in that country may be payable, of course.

• To be non-resident you must spend fewer than 16 days in the UK during a tax year or fewer than 46 days if you haven’t resided in the UK for three previous tax years.
• You can also be non-resident if you’ve worked in another country full-time (at least 35 hours a week on average), spent fewer than 91 days in the UK and worked for no more than 30 of them in the UK.
• You can be resident for tax purposes in more than one country at the same time. This is called “dual residence”.

Need to know! You can be taxed on your UK income by HMRC and the tax authority in the country where you’re resident. If there is a “double-taxation agreement” between the UK and that country, you can apply for partial/full tax relief before you’ve been taxed or a post-payment tax refund.

What income is and isn’t taxable in the UK?

If you’re non-resident for tax in the UK, no UK tax is payable on income or gains you receive in overseas countries. However, UK tax may be payable on your UK income, which can include:

• UK self-employed income
• wages from UK employment
• income from renting out UK land or property
• private pension payments
• savings interest.

If you’re a UK non-resident and inherit UK property or land, Capital Gains Tax can be payable on gains made from sale. You won’t pay Inheritance Tax on UK assets that you inherit,  

If income isn’t taxable in the UK as a result of a double taxation treaty between the UK and the country where you are resident, you may need to complete and attach a claim form (HS302/HS304) to your Self-Assessment tax return.

Need to know! You may need to complete a Self Assessment tax return to report pension payments you’ve received from other countries if you were UK resident in any of the previous five tax years. Income Tax is no longer automatically taken from interest on savings and investments, you must report it if taxable.

Will you get your Personal Allowance?

You’ll get the Personal Allowance of tax-free UK income each year if you’re a British citizen, a citizen of a European Economic Area country or you’ve worked for the UK government during that tax year. You can also claim it if the country in which you live has a double-taxation agreement with the UK that includes it. HMRC includes more details on this within its SA109 help notes for boxes 14 and 15.

Need to know! If you’re eligible for the Personal Allowance (those with taxable income of more than £125,140 a year aren’t), you won’t pay tax on your total UK taxable income until it goes over the threshold.

How much tax will you pay on your UK income?

Your UK Income Tax bill will be determined by the Income Tax band into which your total UK taxable income falls.

Band	Taxable income	Tax rate
Personal Allowance	Up to £12,570	0%
Basic rate	£12,571 to £50,270	20%
Higher rate	£50,271 to £125,140	40%
Additional rate	Over £125,140	45%

The Income Tax bands/rates are different in Scotland.

Need to know! To help minimise your Income Tax bill, you may be able to claim tax reliefs and allowances. Make sure you find out which ones you can claim, because it can lower your Income Tax bill significantly.

How to report your taxable UK income to HMRC

If you live overseas and receive taxable UK income, each year you’ll need to complete and file a Self Assessment tax return (the SA100), as well as the SA109 supplementary pages (you fill these in to report your residence and domicile status).

• If you receive taxable income from renting out land or property in the UK, you’ll also need to complete and file the SA105 supplementary pages.
• If you’ve earned taxable UK income from self-employment, you’ll also need to fill out and file the SA103 supplementary pages.
• There can be other supplementary pages to complete, depending on how you earn or receive UK taxable income.

Once you’ve completed and filed your Self Assessment tax return, your SA109 and any supplementary pages as required, HMRC will be able to work out and tell you how much tax you owe.

The deadlines for paying your tax bill are:

• 31 January for any tax you owe for the previous tax year (called a balancing payment) and your first payment on account then
• 31 July for your second payment on account (which completes payment).

Need to know! You can’t use HMRC’s online services to file your Self Assessment tax return, SA109 and any supplementary pages if you’re living overseas. Many people get around this problem by using commercial Self Assessment filing software, which is reasonably simple to use and much cheaper than paying an accountant to complete and file your Self assessment tax return for you.

Registering for Self Assessment

• If you need to report taxable UK income to HMRC and you don’t already file a Self Assessment tax return, you must register by 5 October following the UK tax year (5 April until 6 April) in which you earned UK taxable income. If you don’t register, you can be fined.
• Each year, the Self Assessment online-filing deadline is midnight on 31 January. If you miss it, there’s an immediate £100 fine, which increases after three months, and again after six. Best to get it done and dusted as soon as possible. You can file any time after the UK tax year ends on 5 April.

What if you don’t pay UK tax on UK income?

You’ll need to keep accurate records of your UK-taxable income and tax expenses, for example, from self-employment or renting out property, because HMRC can request proof of the Self Assessment information that you report. You must keep such records for at least five years after the filing deadline for each tax year.

Need to know! If you fail to report income that is taxable in the UK and HMRC finds out, you’ll not only have to pay the undeclared tax, but also a penalty – which can be up to double the amount of tax that you owe. You can also be prosecuted for providing false information to HMRC.

GoSimpleTax is award-winning software that makes it quick and easy to complete and file your Self Assessment tax return, SA109 and other supplementary pages from overseas. It can also prevent you from making basic tax return errors that can later cost you time and money. Many expat Brits already use, trust and love GoSimpleTax. Start your FREE trial today!

Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.