How to pay tax on your foreign income

2 min read
Last updated 29 Dec 2023

If you live in the UK and have foreign income, you’ll usually have to pay UK tax on it.

You do this by filing a Self Assessment tax return – TaxScouts can help you do it 100% online.

What kinds of foreign income will I pay tax on?

The foreign income will be taxed the same way as any UK income. These are examples of the kinds of foreign income you’d have to pay tax on:

Wages from overseas jobs
Rental income from overseas properties
Foreign investments
Savings

How much will I have to pay?

Like we mentioned, foreign income is the same way as income from the UK. The easiest way to figure out how much you need to pay is by using this handy Income Tax calculator.

Your situation

Tax and profit

Total earnings
£50,000
Tax to pay
£10,480
£7,486 income tax
£2,994 class 1 National Insurance
What you're left with
£39,520

How your income tax is calculated

As an employee your income tax is normally deducted automatically by your employer based on your salary.
Most of the time you don’t have to make any additional tax payments.

However you may be eligible for a tax refund or may need to make an additional tax payment when:

You change jobs or earn over £100,000
Do things that qualify for tax relief (make pension payments, give to charity, etc)
Earn additional income from other sources other than your employment

In your case when you earn £50,000:

Income tax breakdown

You pay no income tax on first £12,570 that you make

You pay £7,486 at basic income tax rate (20%) on the next £37,430

National insurance contributions breakdown

No contributions on the first £12,570 that you make

You pay £2,994 in contributions (at 8%) on the next £37,430 that you make

Tax bill amount £10,480

I want to pay by

Savings frequency

You need to save

£15.74 per day

to pay your £10,480.16 tax bill by 31/1/2027 which is in 666 days

If you made profits of more than £3,000 from selling foreign investments or property, use our Capital Gains Tax calculator instead.

How do I know if I’m a UK resident?

HMRC considers you a UK resident if you either:

Spent 183 days or more in the UK during that tax year
Owned or rented your only home for 90 days or more in the UK, and spent at least 30 days here

If your status changes during the tax year you might be able to pay UK tax only on the money you made as a UK resident. For more information, you should contact HMRC directly.

What if my permanent home is abroad?

You can be a UK resident while still having your permanent home abroad.

This is called being a non-domiciled resident:

If you only have under £2,000 of foreign income and keep it abroad, you don’t pay UK tax on it
If you have foreign income over £2,000, then submit a Self Assessment tax return and either pay UK tax on it or contact HMRC and claim the remittance basis

In any case, you still have to pay UK tax on any income and gains from the UK.

What does the remittance basis mean?

You only pay UK tax on the income or gains you bring to the UK
You lose your tax-free Personal Allowance and CGT Allowance
You also have to pay £30,000 or £60,000, depending on how long you’ve been a resident in the UK

What if I live abroad and have UK income?

You have to pay UK tax on it – read our guide on how to pay UK taxes when living abroad.

See more on:

foreign income

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How to pay tax on your foreign income

What kinds of foreign income will I pay tax on?