In the UK, foreign employment income (earnings from work performed abroad) is generally taxable if you are a UK resident for tax purposes under the Statutory Residence Test (SRT). The key criteria for whether you must submit a Self Assessment (SA) tax return (form SA100 and relevant supplementary pages) for such income are outlined below, based on HMRC guidance for the 2024-25 tax year (6 April 2024 to 5 April 2025). These apply regardless of whether the income was remitted to the UK, unless you qualify for and claim the remittance basis (which typically requires non-UK domicile and use of form SA109).
1. Residency Status
- UK Resident: You must report foreign employment income if you are UK resident (as determined by the SRT, considering factors like days spent in the UK, ties to the UK, and home/work circumstances). Worldwide income is taxable in the UK, so foreign earnings are included unless exempt under a Double Taxation Agreement (DTA) or other reliefs.
- If you became or ceased UK resident during the year, split-year treatment may apply (via SA109), but reporting is still required if any portion is taxable.
- Non-UK Resident: Foreign employment income is generally not taxable in the UK unless it relates to duties performed in the UK or is remitted here. However, if you have any UK-source income or gains, or if remittance basis applies, a return may still be needed.
- If you are eligible for Overseas Workday Relief (OWR) – e.g., non-UK domiciled, recently returned to the UK, and employment duties partly abroad – unremitted foreign earnings may not be taxable, but you must still report via SA109 if claiming OWR.
2. Income Thresholds and Taxability
- General Threshold for SA Return: You must file if you have any foreign income (including employment earnings) that is untaxed in the UK. There is no specific de minimis for foreign employment, but:
- If total untaxed foreign income (all sources) exceeds £2,000 in the 2024-25 tax year, you must declare it.
- For smaller amounts (£300 or less), you may avoid filing if foreign tax paid equals or exceeds the UK tax due (via informal arrangement with HMRC), but this is discretionary and not guaranteed. Contact HMRC to confirm.
- Taxed Abroad: If foreign tax was withheld, you can claim Foreign Tax Credit Relief (FTCR) to avoid double taxation, but you must still report the income if it’s taxable in the UK.
- DTA in Place: Check if a DTA exists with the foreign country (listed in SA106 notes, pages 3-5). DTAs may limit UK taxation or allow relief, but reporting is required to claim it.
- Remittance Basis: If non-UK domiciled and claiming remittance basis (via SA109), only income remitted to the UK is taxable. You must file if remittances exceed thresholds or if claiming reliefs.
- Exemptions: Income is exempt if covered by a DTA allocating taxing rights solely to the foreign country, or if it’s small and foreign tax matches UK liability. However, you must notify HMRC by 31 January 2026 if no return is needed to avoid penalties.
3. Other Triggers for Filing
- You received a notice to file from HMRC.
- The income pushes your total taxable income over £150,000, triggers High Income Child Benefit Charge, or involves other complexities (e.g., self-employment overlap, pensions, or capital gains).
- You want to claim reliefs like FTCR, OWR, or split-year treatment.
- Employer pays foreign tax on your behalf: This is treated as additional gross pay, requiring reporting.
- If the income relates to UK duties while abroad (e.g., for a UK employer), it may be under UK PAYE, reducing the need for SA unless adjustments are needed.
4. When You Do Not Need to File
- No foreign income, or it’s fully exempt under DTA and not remitted.
- Small amounts (£300 or less) where foreign tax >= UK tax, and HMRC agrees informally (call 0300 200 3300 to check).
- You’re non-resident and have no UK-taxable elements.
- Use the online tool at www.gov.uk/check-if-you-need-tax-return to confirm.
If in doubt, consult a tax advisor, as incorrect non-filing can lead to penalties (up to 100% of tax due plus interest). File online by 31 January 2026 or paper by 31 October 2025 for HMRC to calculate tax if needed.
Foreign employment income is reported on the SA102 ‘Employment’ pages (one per job), with foreign tax details on SA106 ‘Foreign’ pages for FTCR. Use SA109 for residence/remittance issues.
Checklist of Documents, Evidence, Receipts, Dates, Invoices, and Forms Needed
When preparing and submitting a Self Assessment tax return for foreign employment income, you do not need to attach documents to the return itself (HMRC accepts the figures you provide). However, you must keep records for at least 6 years (or 22 months if self-employed) in case of enquiry. If filing on paper or if HMRC requests, you may need to provide evidence. Gather these to accurately complete the return and support claims like FTCR (which requires proof of foreign tax paid under local laws, including filing a foreign return if required).
Essential Forms
- SA100: Main tax return form.
- SA102: Employment pages (one per foreign employment; report gross income, benefits, expenses).
- SA106: Foreign pages (for claiming FTCR on foreign tax paid; include country code, gross income, tax paid in GBP).
- SA109: Residence, remittance basis etc. pages (if non-UK domiciled, claiming remittance basis, OWR, or split-year treatment).
- Helpsheet HS263: Relief for foreign tax paid (working sheet for calculating FTCR if doing it yourself).
- Helpsheet HS264: Remittance basis (if applicable).
Income and Payment Evidence
- Payslips or wage statements from the foreign employer (showing gross pay, deductions, tax withheld, in foreign currency and dates paid).
- Foreign equivalent of P60/P45 (end-of-year tax certificate, e.g., US W-2, German Lohnsteuerbescheinigung) detailing annual earnings, tax paid, and social security contributions.
- Employment contract or offer letter (detailing salary, bonuses, benefits, duties location, and any tax equalization clauses).
- Bank statements (showing receipt of salary, remittances to UK if on remittance basis, with transaction dates and amounts).
- Invoices or receipts for any employment-related expenses claimed (e.g., travel, tools; must be allowable under UK rules).
Tax and Relief Evidence
- Foreign tax withholding certificates or payment receipts (proof of tax paid abroad, including amounts and dates).
- Copy of foreign tax return filed (if required for FTCR; shows all allowances/reliefs claimed to ensure ‘minimum’ tax paid).
- Foreign tax assessment notice (from foreign tax authority, confirming final tax liability).
- DTA reference (printout of relevant UK-foreign country DTA from www.gov.uk/government/collections/tax-treaties).
- Exchange rate documentation (e.g., HMRC annual rates from www.gov.uk/government/publications/exchange-rates-for-customs-and-vat-yearly, or spot rates from OANDA/XE on payment/remittance dates; used to convert to GBP).
Residence and Other Supporting Evidence
- Passport stamps, travel itineraries, or visa documents (to prove days spent in UK/abroad for SRT or split-year).
- Proof of domicile (e.g., birth certificate, family ties documents if claiming non-UK domicile for remittance basis/OWR).
- Records of remittances (e.g., wire transfer confirmations, dates, and amounts if on remittance basis).
- Any correspondence with HMRC or foreign tax authorities (e.g., prior agreements on small income exemptions).
Keep all in organized files (digital or paper). If HMRC enquires, provide within 30 days. For complex cases (e.g., DTAs, OWR), consider professional help to avoid errors.