HMRC has issued a warning (Image: Alamy/PA)
Taxpayers with income from abroad have been hit with a stark warning from and a tax expert as the January 31 self-assessment deadline approaches. Without proper preparation, individuals could be taxed twice – in both the UK and the country where the income is earned.
The Government is urging immediate action to avoid overpaying or missing out on tax relief. An expert has highlighted the complexities of managing foreign income taxation and the significance of understanding double-taxation agreements to prevent penalties.
points out that foreign income, including earnings, investments, or pensions, may be subject to dual taxation. Double-taxation agreements exist to offer relief and reduce tax liability.
Tax consultant Andy Wood from advises: “Getting taxed twice on income from abroad can be confusing and expensive. With the self-assessment deadline just around the corner, it’s really important to tackle any potential double taxation issues now. If you wait too long, you could end up with a bigger tax bill than necessary.”
HM Revenue and Customs () has signalled a helping hand towards taxpayers, steering them towards its on double taxation, featuring a section entitled “if you’re taxed twice”. It has put together a guide to claim Foreign Tax Credit Relief for income already taxed elsewhere or to secure tax relief from the original source country.
Andy said: ” has some helpful guidance on double taxation, especially for people dealing with foreign income for the first time. That said, the process of claiming relief – whether through Foreign Tax Credit Relief or double-taxation agreements – can still feel overwhelming. Getting advice from a tax expert can make sure you don’t miss any steps, especially when dealing with international tax laws.”
Andy warned against the financial pitfalls of missing the looming January 31 tax return deadline. A late submission could lead to the dread of fines and heightened stress due to more complex tax matters.
Moreover, stalling one’s filing duties may complicate the quest to obtain rightful tax relief, which might saddle taxpayers with paying in excess.
He further cautioned: “Missing the January 31 deadline can lead to fines and extra headaches. For anyone with foreign income, a late filing could mean paying too much tax or struggling to reclaim what you’re owed. It’s best to get your tax return sorted now to avoid penalties and make sure everything’s accurate.”
How to navigate double taxation
For those impacted, it’s crucial to gather the necessary documentation, such as evidence of foreign tax paid, and fill out the required forms from . Double-taxation agreements can differ based on the country, so understanding the specific terms is vital.
Andy commented: “Double-taxation agreements are there to simplify things, but they’re not always straightforward. The terms vary depending on the country, and the amount of relief you can claim depends on those agreements. That’s why getting proper advice is so important-it can save you a lot of stress and money in the long run.”
He further advised: “Don’t wait until the last minute. Whether it’s foreign income or something else, sorting your taxes now can save you from overpaying or getting fined later. If you’re not sure where to start, talk to a tax expert or check ‘s resources – they’re there to help.”