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How to pay tax on your foreign income

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?

Most types of income will be taxed the same way as any UK income:

How much will I have to pay?

Foreign income is taxed in the UK the same way as income from UK sources.

The easiest way to figure out how much you need to pay is by using this income tax calculator.

Annual self-employment income
£
Self-employment expenses
£
Select tax year
Income after tax
£37.9k
Income tax
£7.3k
NI
£3.8k
Total income tax
£7,300
£12,500 taxed at 0%
£36,500 taxed at 20% : £7,300
Total NI contributions
£3,789
Class 2 NI: £156
Class 4 NI at 9% : £3,633
What you’re left with
£37,911

How your income tax is calculated

As a self-employed you have to pay your income tax and national insurance contributions yourself during your annual self assessment. Our calculator helps you quickly assess how much payment is due.

However you may be eligible for a tax refund when:

  1. You already made tax payments for the year but your annual income ended up smaller than planned
  2. You have done things that qualify for tax relief (made private pension contributions, give to charity, etc)

In your case when you earn £49,000:

Income tax breakdown

You pay no income tax on first £12,500 that you make

You pay £7,300 at basic income tax rate (20%) on the next £36,500

If you made profits 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. 

What if my permanent home is abroad?

Yes, 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 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
  • but you lose your tax-free personal allowance and CGT allowance
  • and you also have to pay £30,000 or £60,000, depending on how long you’ve been a resident in the UK.

We don’t recommend it unless you’re very wealthy.

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.

More guides & useful information

Let us sort your Self Assessment online. £119, all in.

That’s right. No matter how complicated it gets or why you need to do a return in the first place, it’ll cost £119 to get it done. That includes VAT, last-minute changes and all the support you may need.

How it works

1. Answer a few simple questions

And we mean a few. After a couple of minutes of answering questions online we’ll have everything we need to start working on your tax return.

2. Then get paired with a tax accountant

That’s right, you’ll be matched with a real accountant who is best suited to prepare your return. Plus, they’re on hand for questions whenever you need.

3. We file your Self Assessment for you

Once you’ve signed off your return, your TaxScouts accountant will file your return online with HMRC. That’s it! We told you it was simple.