When would I need to submit a tax return?

Brie

Never done a tax return in the UK.  Where I used to live, yes, as there was no easy PAYG system.

So now that life is getting a bit more complicated how do I know if I need to submit a return?  

I have a salary from a part time job, monthly income from a DB scheme, about to have SP kick into payment, looking at what I'll do potentially with some DC funds (buying an annuity is likely).  I think that all of those are pretty normal. 

But I also have what is essentially a SP from another country.  I suspect that tax will be payable there - except it won't because I don't get very much paid to me.  But will have to submit a tax return there (I think, not sure).  But if I don't pay tax there and I do pay tax here do I have to submit something about this foreign income?  I mean, how would the UK government even know about it unless I told them (or they're spying on me......)

p00hsticks

Brie said:

 I mean, how would the UK government even know about it unless I told them (or they're spying on me......)

When you applied for your SP, were you not asked if you had ever worked abroad, and if so where and when ?
I think the reasoning for that question is so that DWP can identify if you are possibly eligible for a foreign pension and if so to liaise with their counterparts in those countries...  

Brie

p00hsticks said:

Brie said:

 I mean, how would the UK government even know about it unless I told them (or they're spying on me......)

When you applied for your SP, were you not asked if you had ever worked abroad, and if so where and when ?
I think the reasoning for that question is so that DWP can identify if you are possibly eligible for a foreign pension and if so to liaise with their counterparts in those countries...  

I was asked but no idea what they did with the info.  I've been told I get the full SP (payments start in 2 months).  The other country's SP started in Jan 23 with no questions about where else I might have worked.  Strictly speaking if I have qualified for the full SP here what difference does it make about what other SPs I might have accrued?  I would understand taking it into account if I was combining the 2 to maximise what I get in the UK SP but that wasn't necessary.

KathysBoy

With regard to where you will pay tax on the overseas state pension, this is usually defined in a Double Tax Agreement (DTA) between the two countries. Generally, but not always, if you are UK resident you will pay tax in the UK, but you will receive a credit for any tax you had to pay in the other country. 

You usually need to fill in a Self Assessment form if you’re a UK resident with  foreign income. You should be aware that there is a lot of information exchanged between countries, so it’s a risk to assume that HMRC won’t know about your overseas income.

Brie

KathysBoy said:

With regard to where you will pay tax on the overseas state pension, this is usually defined in a Double Tax Agreement (DTA) between the two countries. Generally, but not always, if you are UK resident you will pay tax in the UK, but you will receive a credit for any tax you had to pay in the other country. 

You usually need to fill in a Self Assessment form if you’re a UK resident with  foreign income. You should be aware that there is a lot of information exchanged between countries, so it’s a risk to assume that HMRC won’t know about your overseas income.

Thanks - I'm not trying to hide anything of course as that would be wrong.  So I'll look at doing a self assessment form at some point.  Given that my foreign SP started in January 23 should I have submitted one for the last tax year?  We're talking about something like maybe £400 for Jan to March so not significant sums.  But since it's so insignificant I wouldn't want to get a big fine for not doing anything.

purdyoaten2

Brie said:

KathysBoy said:

With regard to where you will pay tax on the overseas state pension, this is usually defined in a Double Tax Agreement (DTA) between the two countries. Generally, but not always, if you are UK resident you will pay tax in the UK, but you will receive a credit for any tax you had to pay in the other country. 

You usually need to fill in a Self Assessment form if you’re a UK resident with  foreign income. You should be aware that there is a lot of information exchanged between countries, so it’s a risk to assume that HMRC won’t know about your overseas income.

Thanks - I'm not trying to hide anything of course as that would be wrong.  So I'll look at doing a self assessment form at some point.  Given that my foreign SP started in January 23 should I have submitted one for the last tax year?  We're talking about something like maybe £400 for Jan to March so not significant sums.  But since it's so insignificant I wouldn't want to get a big fine for not doing anything.

I would get round to this quickly and inform HMRC of this income in order that tax is collected as you go.  If you wait to file a self-assessment return for 2023/24, deadline 31st January 2025, you will have had the foreign pension for two years (unless you file asap after 5th April). You will owe two years tax and HMRC will adjust your code to prevent any further underpayment arising.

Brie

Another question for you......how do I know what amount to put on a tax return?  My pension that is being paid is not in ££.  So do I take the set monthly amount I'm getting, translate that once into ££ and then just give them that?  Or do I wait to 5 April and use the FX rate at that date?  Or use the FX rate when I move the money to the UK? (I've yet to get my bank to allow that to happen....but that's another boring story)

molerat

https://community.hmrc.gov.uk/customerforums/sa/dcc3fa78-1b6b-ed11-97b2-00155d3ba57b

All entries on a self assessment tax return must be in pounds sterling.  
To convert from a foreign currency to pounds sterling, please use the official rate of exchange at the time of the exchange.  
You are free to use the yearly rate, the monthly rate or the spot rate.  
If a conversion was undertaken to deposit the money into a UK bank account, then this figure can be used.

Brie

@molerat
much appreciated!!!

purdyoaten2

Historic rates here:

https://www.x-rates.com/historical/?from=USD&amount=1&date=2023-09-17

Brie

purdyoaten2 said:

Historic rates here:

Thanks but haven't yet been able to move any money so I think that's the line I'll take with HMRC.  We're talking about £1k a year so not going to be a huge amount of tax.