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

nigelbb

[Deleted User] said:

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.

I understand perfectly well how it all works. I have been tax resident in France for several years while returning to the UK for employment that was taxed under PAYE. On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

[Deleted User]

nigelbb said:

[Deleted User] said:

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.

I understand perfectly well how it all works. I have been tax resident in France for several years while returning to the UK for employment that was taxed under PAYE. On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

Eureka! You complete a tax return in France where you are resident and claim DTR for tax paid in U.K. 

The op should therefore complete a tax return in the UK  where he is resident (which has been done) and claim DTR for the tax paid in France (which hasn’t been done).

We are agreed!

A minor correction - in France you would get a credit of the French equivalent of the U.K. tax paid or the French tax due on the UK income, whichever is lower. If the French tax on the U.K. income was higher you pay the difference. If lower - no refund of the excess paid. 

sheramber

nigelbb said:

[Deleted User] said:

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.

I understand perfectly well how it all works. I have been tax resident in France for several years while returning to the UK for employment that was taxed under PAYE. On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

Exactly, But that is what you were arguing against by saying the foreign income is not taxed in UK.

nigelbb

[Deleted User] said:

nigelbb said:

[Deleted User] said:

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.

I understand perfectly well how it all works. I have been tax resident in France for several years while returning to the UK for employment that was taxed under PAYE. On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

Eureka! You complete a tax return in France where you are resident and claim DTR for tax paid in U.K. 

The op should therefore complete a tax return in the UK  where he is resident (which has been done) and claim DTR for the tax paid in France (which hasn’t been done).

We are agreed!

A minor correction - in France you would get a credit of the French equivalent of the U.K. tax paid or the French tax due on the UK income, whichever is lower. If the French tax on the U.K. income was higher you pay the difference. If lower - no refund of the excess paid. 

No. That is not how it works. The French tax authorities (le fisc) do not know how much UK tax I paid. Income is declared gross as taxed in the UK. A credit is given for whatever the tax would have been on that income one France. The income is added to my French income to determine what tax band should apply. There is no question of paying tax on income already taxed in the UK as the the Double Taxation Convention declares that income from employment is taxed in the country where the work is undertaken.

nigelbb

sheramber said:

nigelbb said:

[Deleted User] said:

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.

I understand perfectly well how it all works. I have been tax resident in France for several years while returning to the UK for employment that was taxed under PAYE. On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

Exactly, But that is what you were arguing against by saying the foreign income is not taxed in UK.

Foreign income from employment is not taxed in the UK. You get a notional credit of tax paid.

[Deleted User]

nigelbb said:

sheramber said:

nigelbb said:

[Deleted User] said:

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.

I understand perfectly well how it all works. I have been tax resident in France for several years while returning to the UK for employment that was taxed under PAYE. On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

Exactly, But that is what you were arguing against by saying the foreign income is not taxed in UK.

Foreign income from employment is not taxed in the UK. You get a notional credit of tax paid.

My last point on this. You don’t get a notional credit of foreign tax paid automatically - if you did the op would not be in the position they are in. You have to claim it. 

Over and out for me.

sheramber

nigelbb said:

sheramber said:

nigelbb said:

[Deleted User] said:

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.

I understand perfectly well how it all works. I have been tax resident in France for several years while returning to the UK for employment that was taxed under PAYE. On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

Exactly, But that is what you were arguing against by saying the foreign income is not taxed in UK.

Foreign income from employment is not taxed in the UK. You get a notional credit of tax paid.

Having processed such cases for years I can assure that the tax due under UK rules is most definitely charged on foreign earnings.

A credit for the amount of foreign tax paid is given against the amount due.This credit is the actual amount paid, not a notional amount.

IF the foreign tax paid is less than that due under uK taxation rules then the additional amount is due and payable.

Should the foreign tax paid be more than the amount due under IK taxation rules then no refund of the extra amount is made by HMRC.

What happens in France is irrelevant for UK purposes.

A little learning is a dangerous thing

nigelbb

[Deleted User] said:

nigelbb said:

sheramber said:

nigelbb said:

[Deleted User] said:

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.

I understand perfectly well how it all works. I have been tax resident in France for several years while returning to the UK for employment that was taxed under PAYE. On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

Exactly, But that is what you were arguing against by saying the foreign income is not taxed in UK.

Foreign income from employment is not taxed in the UK. You get a notional credit of tax paid.

My last point on this. You don’t get a notional credit of foreign tax paid automatically - if you did the op would not be in the position they are in. You have to claim it. 

Over and out for me.

Of course you don't get a credit for foreign tax automatically. HMRC don't even know that you have relevant overseas earnings until you tell them on the self assessment form. The only reason that we have been having this discussion is because the 'tax adviser' filled in the self assessment incorrectly.

sheramber

nigelbb said:

[Deleted User] said:

nigelbb said:

sheramber said:

nigelbb said:

[Deleted User] said:

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.

I understand perfectly well how it all works. I have been tax resident in France for several years while returning to the UK for employment that was taxed under PAYE. On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

On my French tax return I enter the gross amount in the section for foreign earnings & I get a credit for tax paid in the UK equal to the amount that I would pay if that income were taxed in France. It's exactly the same mechanism when declaring on a UK tax return.

Exactly, But that is what you were arguing against by saying the foreign income is not taxed in UK.

Foreign income from employment is not taxed in the UK. You get a notional credit of tax paid.

My last point on this. You don’t get a notional credit of foreign tax paid automatically - if you did the op would not be in the position they are in. You have to claim it. 

Over and out for me.

Of course you don't get a credit for foreign tax automatically. HMRC don't even know that you have relevant overseas earnings until you tell them on the self assessment form. The only reason that we have been having this discussion is because the 'tax adviser' filled in the self assessment incorrectly.

The reason for this discussion was your statement
Earnings from employment in France are not subject to UK income tax.

which you now admit is wrong