reasons - Tax Filing Limited

About additional comments

This is entirely optional.

If you want to share any additional or clarifying information about the circumstance of your foreign income or tax residency, including your tax domicile, you can do it here.

Remittance basis

The remittance basis is an alternative tax treatment that is available to individuals who are resident but consider their permanent home to be outside of the UK (non-domiciled) and have foreign income and gains.

A non-domiciled person (sometimes called a “non-dom”) is a person living in the UK but who considers their permanent home to not be in the UK.

What does this mean for me?

Non-domiciled residents do not pay UK taxes on earnings from abroad unless they are transferred into a UK account (for example, rental properties overseas).
Non-domiciled residents lose their personal allowance and capital gains allowance.
A special annual charge is also required to maintain long-term non-domiciled status. A charge of either £30,000 or £60,000 depending on the length of UK residency
Also if you choose to transfer foreign earnings into a UK account later, you’ll then be required to pay tax on that income.

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How do I know?

How do I know if I’m a UK tax resident?

If you are physically present in the UK for 183 days or more in a tax year, you will be tax resident in the UK for that year.

What does this mean for me?

If you’re a UK tax resident, you’ll pay tax on all your income; both from the UK andabroad unless you’re a non-dom.
If you’re a non-resident, you won’t pay tax on your foreign income, you’ll instead only pay tax on your UK income.

What if I am in the UK for under 183 days?

It is still possible for you to be resident in the UK.

HMRC will automatically consider you a UK resident if:

you have a home in the UK, and you’re there for over 90 days (for most cases) per tax year
you work full-time in the UK for 365 days (this test usually affects two or more tax years)

Can I be a dual resident?

Yes, you can be a tax resident in more than one country at the same time.

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Am I self-employed?

Being self-employed means you’re working for yourself. It’s the same thing as being a “sole trader”.

The usual way you’re getting paid as self-employed is by invoicing your clients. You’re also the one responsible for paying Income Tax and National Insurance on this income. You do this by filing a tax return with HMRC.

Examples of self-employed people:

freelancers (writers, interior designers, personal trainers, etc.),
private hire and delivery drivers (Uber, Deliveroo, etc.),
hairdressers renting a chair in a salon,
contractors and consultants who aren’t working as a limited company, and
CIS construction workers.
You are NOT self-employed when:

Your employer pays your salary through PAYE. In this case, they pay your taxes and you shouldn’t need to do anything.
You do business through your own limited company. In this case, even though you work for yourself, HMRC doesn’t consider you to be “self-employed”. You’re actually an employee of your own company, and you can pay yourself through PAYE and/or dividends.
If you’re not sure if you’re employed, ask the company you work for.

Am I self-employed?

Being self-employed means you’re working for yourself. It’s the same thing as being a “sole trader”.

The usual way you’re getting paid as self-employed is by invoicing your clients. You’re also the one responsible for paying Income Tax and National Insurance on this income. You do this by filing a tax return with HMRC.

Examples of self-employed people:

freelancers (writers, interior designers, personal trainers, etc.),
private hire and delivery drivers (Uber, Deliveroo, etc.),
hairdressers renting a chair in a salon,
contractors and consultants who aren’t working as a limited company, and
CIS construction workers.
You are NOT self-employed when:

Your employer pays your salary through PAYE. In this case, they pay your taxes and you shouldn’t need to do anything.
You do business through your own limited company. In this case, even though you work for yourself, HMRC doesn’t consider you to be “self-employed”. You’re actually an employee of your own company, and you can pay yourself through PAYE and/or dividends.
If you’re not sure if you’re employed, ask the company you work for.

Marriage Allowance

If your spouse earns less than £12,500 a year they can transfer their annual income tax allowance to yourself.

Pension Contributions

When you make payments into your pension pot – some of your money that would have gone to the government as tax is put into your pension instead.

This tax relief is handled automatically for most people who make their contributions through employer payroll and earn less than £45,000.

If you make pension contributions out of your own pocket or earn over £45,000 you can normally claim the relief back from HMRC as refund. You just need to show the total amount of payments that have been made into your pension pot.

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