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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:

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

Outlined number oneImage of an arrow
I am
Annual self-employed income
Self-employed expenses

Tax and profit

Outlined number two
  • Total earnings
    £1,000 tax-free Trading Allowance
  • Tax to pay
    £7,286 income tax
    £0 class 2 National Insurance
    £2,186 class 4 National Insurance
  • What you’re left with

How your income tax is calculated

When you’re self-employed, you have to pay your income tax and national insurance contributions yourself in your annual Self Assessment. Our calculator helps you quickly assess how much you owe.

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 less than planned
  2. You have done things that qualify for a tax relief (made private pension contributions, given to charity, etc.)

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 £7,286 at basic income tax rate (20%) on the next £36,430

National insurance contributions breakdown

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

You pay £2,186 in contributions (at 6%) on the next £36,430 that you make

You pay £0 in NI Class 2 contributions

Tax bill amount £9,472
I want to pay by
Savings frequency

You need to save

£14.22 per day

to pay your £9,471.56 tax bill by 31/1/2026 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.

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