Do I have to report my foreign income in the UK?

Do I have to report my foreign income in the UK?

Many UK residents are foreigners and earn income from their home country.

As soon as you live in the UK, you are considered to be tax resident and must declare your foreign income to the UK tax authorities.

In England, the fiscal year begins on April 6 and ends on April 5 of the following year. The taxpayer must file their return and pay income tax before January 31 of the following year.

The status of the declaration

The declaration can be made under 2 different statuses:

  • The remittance basis
  • The arising basis

The choice of status depends on several factors: the amount of your income, your date of arrival in Great Britain, the amount transferred to Great Britain, etc.

Remittance Basis

Under this status you are liable to UK tax on your foreign income and / or earnings returned (remitted) to the UK, as well than on all of your income received in the United Kingdom.

Arising Basis

Under this status, all of your worldwide income must be declared.

Exempt cases

Some income is not subject to UK tax. Especially if they come from:

  • Individual savings accounts (ISA)
  • Child trust funds
  • Child tax credit
  • Savings certificates
  • Child allowance
  • The first ÂŁ30,000 corresponding to compensation for job loss.

Non-exhaustive list.

English tax

If the tax paid in your home country is lower than the English tax, you will be liable for the difference between the tax already paid and the 'English tax.

If the tax paid in your home country is higher than UK tax, you will not be subject to double taxation.

Penalties

In case of non-declaration a penalty of ÂŁ100 will be due. In addition, you expose yourself to:

  • A fine of up to 200% of the amount of tax payable.
  • An additional penalty of up to 10% of the asset value.
  • "Naming and shaming": your name published on the internet.
  • Penalties of up to 300% if the asset has been moved to hide it.