Correcting last year's tax return. Double taxed on foreign income.

unhinged

eskbanker said:

unhinged said:

My son's 22-23 self assessment was done by a tax advisor -he will be doing it on his own this year as he has gone a back to uni. He has been double taxed on income in France and UK. He would like to get this corrected but can't do it online through self assessment as the return was done by a tax advisor..

What is it that convinces him (or you) that he (or you) knows better than the tax advisor?  If there's some reliable and authoritative source that definitively contradicts what the tax advisor has done then this ought to be handled as a complaint against the advisor....

The tax advisor didn't receive the info in time to submit for DTR

unhinged

[Deleted User] said:

nigelbb said:

What income do you think has been double taxed in both France & the UK? How is it that he has paid tax in both UK & France? Normally income from employment is taxable in the country where the work was undertaken. Has he completed a French tax return?

We just need much more information before we can advise you. It must be vey unusual for a university student to be required to submit a self assessment tax return.

It ‘seems’ that the French income was declared on a U.K. return and, perhaps, DTR not claimed. 

But, as you say, we don’t know for sure.

He was doing agency work. French tax and social security was taken off from pay. DTR as you say was not claimed as info necessary was submitted too late-- young person's procrastination to blame.

nigelbb

unhinged said:

[Deleted User] said:

nigelbb said:

What income do you think has been double taxed in both France & the UK? How is it that he has paid tax in both UK & France? Normally income from employment is taxable in the country where the work was undertaken. Has he completed a French tax return?

We just need much more information before we can advise you. It must be vey unusual for a university student to be required to submit a self assessment tax return.

It ‘seems’ that the French income was declared on a U.K. return and, perhaps, DTR not claimed. 

But, as you say, we don’t know for sure.

He was doing agency work. French tax and social security was taken off from pay. DTR as you say was not claimed as info necessary was submitted too late-- young person's procrastination to blame.

Your explanation is unclear. If this agency work was undertaken in France then it's quite correct if there were deductions from pay for French tax and social security. Earnings from employment in France are not subject to UK income tax or National Insurance.

Phoenix72

nigelbb said:

unhinged said:

[Deleted User] said:

nigelbb said:

What income do you think has been double taxed in both France & the UK? How is it that he has paid tax in both UK & France? Normally income from employment is taxable in the country where the work was undertaken. Has he completed a French tax return?

We just need much more information before we can advise you. It must be vey unusual for a university student to be required to submit a self assessment tax return.

It ‘seems’ that the French income was declared on a U.K. return and, perhaps, DTR not claimed. 

But, as you say, we don’t know for sure.

He was doing agency work. French tax and social security was taken off from pay. DTR as you say was not claimed as info necessary was submitted too late-- young person's procrastination to blame.

Earnings from employment in France are not subject to UK income tax or National Insurance.

Where on earth did you get that from?

nigelbb

Phoenix72 said:

nigelbb said:

unhinged said:

[Deleted User] said:

nigelbb said:

What income do you think has been double taxed in both France & the UK? How is it that he has paid tax in both UK & France? Normally income from employment is taxable in the country where the work was undertaken. Has he completed a French tax return?

We just need much more information before we can advise you. It must be vey unusual for a university student to be required to submit a self assessment tax return.

It ‘seems’ that the French income was declared on a U.K. return and, perhaps, DTR not claimed. 

But, as you say, we don’t know for sure.

He was doing agency work. French tax and social security was taken off from pay. DTR as you say was not claimed as info necessary was submitted too late-- young person's procrastination to blame.

Earnings from employment in France are not subject to UK income tax or National Insurance.

Where on earth did you get that from?

The UK France Double Taxation Convention (aka the Double Taxation Treaty). Specifically Article 15 INCOME FROM EMPLOYMENT.

1. Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

https://assets.publishing.service.gov.uk/media/5a80112ced915d74e33f840a/france_dtc_-_in_force.pdf

Put simply if you are employed in France your salary is taxable in France even if you are tax resident in the UK. Likewise if a French resident had a holiday job in the UK they would pay UK income tax & National Insurance via PAYE.

[Deleted User]

nigelbb said:

Phoenix72 said:

nigelbb said:

unhinged said:

[Deleted User] said:

nigelbb said:

What income do you think has been double taxed in both France & the UK? How is it that he has paid tax in both UK & France? Normally income from employment is taxable in the country where the work was undertaken. Has he completed a French tax return?

We just need much more information before we can advise you. It must be vey unusual for a university student to be required to submit a self assessment tax return.

It ‘seems’ that the French income was declared on a U.K. return and, perhaps, DTR not claimed. 

But, as you say, we don’t know for sure.

He was doing agency work. French tax and social security was taken off from pay. DTR as you say was not claimed as info necessary was submitted too late-- young person's procrastination to blame.

Earnings from employment in France are not subject to UK income tax or National Insurance.

Where on earth did you get that from?

The UK France Double Taxation Convention (aka the Double Taxation Treaty). Specifically Article 15 INCOME FROM EMPLOYMENT.

1. Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

https://assets.publishing.service.gov.uk/media/5a80112ced915d74e33f840a/france_dtc_-_in_force.pdf

Put simply if you are employed in France your salary is taxable in France even if you are tax resident in the UK. Likewise if a French resident had a holiday job in the UK they would pay UK income tax & National Insurance via PAYE.

If you are a U.K. resident you are taxable on your world income, regardless of whether it has been taxed elsewhere or not. 

What I believe you are alluding to is whether or not the salary in France should be taxed in France in the first place which is irrelevant as it clearly has.

From HMRC:

You may not have to pay twice if the country you’re resident in has a ‘double-taxation agreement’ with the UK. Depending on the agreement, you can apply for either:

• partial or full relief before you’ve been taxed
• a refund after you’ve been taxed

https://www.gov.uk/tax-uk-income-live-abroad/taxed-twice

nigelbb

[Deleted User] said:

nigelbb said:

Phoenix72 said:

nigelbb said:

unhinged said:

[Deleted User] said:

nigelbb said:

What income do you think has been double taxed in both France & the UK? How is it that he has paid tax in both UK & France? Normally income from employment is taxable in the country where the work was undertaken. Has he completed a French tax return?

We just need much more information before we can advise you. It must be vey unusual for a university student to be required to submit a self assessment tax return.

It ‘seems’ that the French income was declared on a U.K. return and, perhaps, DTR not claimed. 

But, as you say, we don’t know for sure.

He was doing agency work. French tax and social security was taken off from pay. DTR as you say was not claimed as info necessary was submitted too late-- young person's procrastination to blame.

Earnings from employment in France are not subject to UK income tax or National Insurance.

Where on earth did you get that from?

The UK France Double Taxation ConventionUK France Double Taxation Convention.gov.uk/media/5a80112ced915d74e33f840a/france_dtc_-_in_force.pdf

Put simply if you are employed in France your salary is taxable in France even if you are tax resident in the UK. Likewise if a French resident had a holiday job in the UK they would pay UK income tax & National Insurance via PAYE.

If you are a U.K. resident you are taxable on your world income, regardless of whether it has been taxed elsewhere or not. 

What I believe you are alluding to is whether or not the salary in France should be taxed in France in the first place which is irrelevant as it clearly has.

From HMRC:

You may not have to pay twice if the country you’re resident in has a ‘double-taxation agreement’ with the UK. Depending on the agreement, you can apply for either:

• partial or full relief before you’ve been taxed
• a refund after you’ve been taxed

https://www.gov.uk/tax-uk-income-live-abroad/taxed-twice

Never mind "You may not have to pay twice if ...". This is is specifically regarding the UK France Double Taxation Convention & following the OECD model for double taxation treaties this states that any earnings from employment are only taxable in the country where the work was physically undertaken.
The OP has given only limited information & refuses to answer questions so it's not clear what has happened. If the income was taxed at source in France then it should have been declared as tax paid on a UK tax return & no UK tax would be liable. I am not sure how UK tax could possibly have been paid on French employment income except if a mistake was made on the self assessment tax return.

[Deleted User]

nigelbb said:

[Deleted User] said:

nigelbb said:

Phoenix72 said:

nigelbb said:

unhinged said:

[Deleted User] said:

nigelbb said:

What income do you think has been double taxed in both France & the UK? How is it that he has paid tax in both UK & France? Normally income from employment is taxable in the country where the work was undertaken. Has he completed a French tax return?

We just need much more information before we can advise you. It must be vey unusual for a university student to be required to submit a self assessment tax return.

It ‘seems’ that the French income was declared on a U.K. return and, perhaps, DTR not claimed. 

But, as you say, we don’t know for sure.

He was doing agency work. French tax and social security was taken off from pay. DTR as you say was not claimed as info necessary was submitted too late-- young person's procrastination to blame.

Earnings from employment in France are not subject to UK income tax or National Insurance.

Where on earth did you get that from?

The UK France Double Taxation ConventionUK France Double Taxation Convention.gov.uk/media/5a80112ced915d74e33f840a/france_dtc_-_in_force.pdf

Put simply if you are employed in France your salary is taxable in France even if you are tax resident in the UK. Likewise if a French resident had a holiday job in the UK they would pay UK income tax & National Insurance via PAYE.

If you are a U.K. resident you are taxable on your world income, regardless of whether it has been taxed elsewhere or not. 

What I believe you are alluding to is whether or not the salary in France should be taxed in France in the first place which is irrelevant as it clearly has.

From HMRC:

You may not have to pay twice if the country you’re resident in has a ‘double-taxation agreement’ with the UK. Depending on the agreement, you can apply for either:

• partial or full relief before you’ve been taxed
• a refund after you’ve been taxed

https://www.gov.uk/tax-uk-income-live-abroad/taxed-twice

Never mind "You may not have to pay twice if ...". This is is specifically regarding the UK France Double Taxation Convention & following the OECD model for double taxation treaties this states that any earnings from employment are only taxable in the country where the work was physically undertaken.
The OP has given only limited information & refuses to answer questions so it's not clear what has happened. If the income was taxed at source in France then it should have been declared as tax paid on a UK tax return & no UK tax would be liable. I am not sure how UK tax could possibly have been paid on French employment income except if a mistake was made on the self assessment tax return.

And that is the whole point of this thread from the opening post. The foreign income was declared on the tax return giving rise to a U.K. tax liability- because there IS a U.K. tax liability. 

The U.K. ‘tax paid on French employment income’ arises from the return. What hadn’t been done is to claim DTR. Whether that is enough to cover the U.K. liability is yet to be determined. DTR will be the lower of the foreign tax paid or the U.K. tax DUE on that source of income.

There is no such concept known to me in all my years working in tax as treating foreign income as ‘declared as tax paid’ - not even sure what that means. How you can exclude there being any possibility of there ever being any U.K. tax liability is beyond me but …..  I will leave it there. Perhaps others can express their opinion?

mybestattempt

I agree with all @[Deleted User] has said.

The HMRC International Manual might assist @nigelbb in understanding the position:

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm151010

[Deleted User]

mybestattempt said:

I agree with all @[Deleted User] has said.

The HMRC International Manual might assist @nigelbb in understanding the position:

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm151010

Indeed - wish I had found that earlier. The short point 2) covers it succinctly.