Self assessment foreign tax credit??? Anyone know??

jennifernil

The £22k odds is about right for tax in Norway on £65k odds as the rate works out at about 36%.

If he had the £65k odds here the tax would be as I calculated, so looks like they are paying over roughly the difference on his behalf to the Norwegian tax people, which of course is a taxable benefit here.

So the Norwegians think he has paid the £22k odds tax, but really he hasn't. It sounds a bit dodgy to me!!

jennifernil

The way jimmo puts it makes sense, but having £17k odds uk tax deducted AND a £22k odds foreign tax credit relief to claim does not make sense.

Sorry jimmo, I type really slowly!

jennifernil

Sharon......does he pay tax here, is there some details on his payslip about that?

Did he get a P60 here? Or anything from Norway?

shamac

As far as we were aware we were paying tax here-his payslip is all in sterling and seems quite normal.

The letter enclosed with the p60 states

"you will note that we have applied our net credit aggreement with the inland revenue to recover foreign tax paid on your behalf"-it then says the company has claimed back £17176 as net credit (which is the tax paid on his payslip).

it then has total pay, tax deducted (which is nil) foreign taxable benefit which is £5011, foreign tax credit relief claim which is the £17k again and employment expenses £5011.

So they have paid this £5011 to Norway on our behalf and it is therefore a benefit? Is that right?:cool:

jennifernil

Hmmm, yes it seems so, but that is really complicated.

What they are doing seems at odds with the figures they have said to enter on the foreign pages.

If he is paid by a company here with Uk tax deducted then it cannot be foreign earnings too.

My husband is paid direct from Norway, with some Norwegian tax deducted, but not as much as he has to pay here, so he has to pay the difference here.

If the £5011 is a benefit then you would have to add it to the £65k odds and work out the tax here, so he would still have some to pay here.

But I am not convinced this is the case as they are suggesting he claims the 5011 as an expense.

Sheesh, I though my husband's tax was complicated....yours is even worse!

I would be contacting them for clarification.

shamac

Thank you so much to everyone for their advice and esp jimmo for your in depth analysis-i have filled in exactly what they advise-yes i found the foreign pages-lets hope the accounts department-which i today discovered is in Dubai (!) know what they are doing!:D