Can someone help me with a foreign income question?

icicat

Hello, I'm filling in my tax return and not sure about this question: If you received any foreign income, do you need to complete the foreign section? Please check help before selecting

So, as I receive payments from all over the world into my PayPal account, they are paid in GBP same if anyone in the UK paid. Though does this class as foreign income? or is there some exemption using PayPal?

In the help it says: income or benefits from a person abroad or a non-resident company or trust, including a UK trust that has either been, or has received, income from, a non-resident trust.

So does this question apply to the money I receive through paypal?

Jeremy535897

No. If you own a coffee shop and a German tourist buys a coffee (in the days when such a simple thing was possible), that isn't foreign income either.

icicat

Yeah you could say they could be on holiday in the UK and pay from their hotel. Though as they are in another country does that not class as 'income from a person abroad? If not what is generally classed as foreign income?

icicat

I think I may have also found the answer here: https://community.hmrc.gov.uk/forums/customerforums/kytr/707c0b30-7ecd-e911-b3b9-00155d9c6b78
So basically the foreign income section is something to do with having already paid foreign tax. Though that line in the help is really confusing as it doesn't mention this.

Jeremy535897

Foreign income is when you have a bank account abroad and earn interest, or dividends on foreign company shares, or if you actually trade from abroad (you own one coffee shop in England and another in France). You might not even know that a tourist visiting your shop in England actually came from Germany.

Cook_County

If you are selling to customers in a country that has VAT you may need to register for VAT & charge VAT to your customers. 

icicat

Thanks for the replies guys. This was mainly freelance work and paid into my account in pounds by hobbyists. I'm pretty confident now I can bypass the foreign income section. Cook: I'm not sure how VAT works. Is this more for small business? Do you have to join something to be vat registered?

oldbikebloke

icicat said:

Thanks for the replies guys. This was mainly freelance work and paid into my account in pounds by hobbyists. I'm pretty confident now I can bypass the foreign income section. Cook: I'm not sure how VAT works. Is this more for small business? Do you have to join something to be vat registered?

Be very careful referring to paying customers as "hobbyists" - by your own admission you are running a business for profit and expect to be paid for that via paypal. That is not the actions of a "hobby"

 just how much are your sales to the EC as thresholds over there are different 

macman

VAT registration is optional until you reach a t/o of £85K.  Unlikely to apply to your situation.

Jeremy535897

macman said:

VAT registration is optional until you reach a t/o of £85K.  Unlikely to apply to your situation.

I don't think it's that simple. See for example:
https://www.haysmacintyre.com/blog/uk-businesses-selling-goods-to-eu-consumers-following-brexit