‘Double tax’ HMRC warning with 10 days to go until | European Markets

Taxpayers with income from overseas have been hit with a stark warning from HMRC and a tax knowledgeable because the January 31 self-assessment deadline approaches. With out correct preparation, people could possibly be taxed twice – in each the UK and the nation the place the income is earned.

The Authorities is urging fast motion to keep away from overpaying or lacking out on tax reduction. An knowledgeable has highlighted the complexities of managing international income taxation and the importance of understanding double-taxation agreements to forestall penalties.

HMRC factors out that international income, together with earnings, investments, or pensions, could also be subject to twin taxation. Double-taxation agreements exist to offer reduction and cut back tax legal responsibility.

Tax guide Andy Wooden from Tax Natives 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 Income and Customs (HMRC) has signalled a serving to hand in direction of taxpayers, steering them in direction of its online advice on double taxation, that includes a part entitled “if you’re taxed twice”. It has put collectively a information to say International Tax Credit score Aid for income already taxed elsewhere or to secure tax reduction from the unique source nation.

Andy mentioned: “HMRC 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 towards the financial pitfalls of lacking the looming January 31 tax return deadline. A late submission might result in the dread of fines and heightened stress attributable to more complicated tax issues.

Furthermore, stalling one’s submitting duties might complicate the hunt to acquire rightful tax reduction, which could saddle taxpayers with paying in extra.

He additional 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.”

The right way to navigate double taxation

For these impacted, it is essential to collect the required documentation, corresponding to proof of international tax paid, and fill out the required kinds from HMRC. Double-taxation agreements can differ primarily based on the nation, so understanding the precise phrases is important.

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 additional suggested: “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 HMRC’s resources – they’re there to help.”