Do I need to file a Self-Assessment Tax return?

Do I need to file a Self-Assessment Tax return?

The deadline for filing the self-assessment tax return online for the tax year 2021/22 is fast approaching. Millions of taxpayers in the UK will need to file their tax returns for 2021/22 and pay their tax bill by 31 January 2023.

Most of the times it is clear whether or not you are required to file a tax return but sometimes it can be confusing. Below are some circumstances where you are required to file a tax return.

  1. Your employment income exceeds £100,000
  2. You receive a rental income of more than £1,000 in a tax year
  3. Your revenue from your sole trader business or self employment is more than £1,000
  4. You receive dividends income from UK or overseas companies
  5. You have sold a property or shares and made a gain
  6. You are arrived in the UK in the tax year

Tax when you arrive in the UK

tax accountants in london

In this article we will concentrate on individuals who arrive in the UK during the tax year and become UK tax residents but are non-UK domiciled. A tax years starts on 6 April and ends on 5 April of the following year. For 2021/22, the tax year started on 6 April 2021 and ended on 5 April 2022.

When you become a UK resident, you are taxed on your worldwide income. As a result, you are required to pay tax on your UK income and your overseas income as well. For example, if you have a UK employment income of £80,000 a year and rental income of £12,000 from your home country, you will be required to pay tax on £92,000 in the UK. Tax credit for the tax paid in the other country might be available.

How Can I Avoid Paying Tax on My Foreign Income in the UK?

To avoid paying tax on your overseas income in the UK, you can claim remittance basis. The remittance basis enables to make a claim that you will only pay tax on your UK income as far as you do not remit your foreign income to the UK.

However, by claiming the remittance basis, you will lose your personal allowance. Therefore it is always advised to compare the tax savings on claiming the remittance basis and paying tax on your worldwide income.

How We can Help You?

Our tax advisers are based in London and to be specific in Wimbledon who are qualified and have years of experience. We can advise you on claiming the remittance basis, split year treatment and maintaining a clean fund before becoming a UK tax resident.

Please feel free to get in touch with us to book an initial free consultation.