Managing UK tax affairs can be tricky when you are an expat. With non-domiciliary status high on the news agenda recently, it’s prudent for expats to ensure they have an accurate understanding of their obligations under UK tax law and that they are fully prepared to report and pay their tax bills.

Written exclusively for Expat Network by Mike Parkes, Expat Tax at GoSimpleTax

Many expats are legally required to complete a self-assessment tax return. If you’re earning while living abroad, but still classed as a UK resident, then you need to pay UK tax on your foreign income – but if your permanent home is abroad then you may not have to.

Either way, expats must know where they stand and ensure they are up to date with their obligations.

So what steps should expats take each year to ensure they stay on the right side of the law?

1. Be prepared

Fail to prepare and prepare to fail, or so the saying goes! UK tax returns are due at the end of every January, with no room for manoeuvre. Don’t let the tax return deadline sneak up on you. As an expat, you should track your overseas income throughout the year and put enough aside to pay your upcoming bill.

2. Understand your picture

It’s the responsibility of the individual to understand their obligations and ensure they meet them. If you aren’t clear on what you need to do, then you should seek advice from a tax expert or from HMRC. Then, when you understand what you must do, it’s good practice to get into the habit of proactively tracking your taxable income so that your self-assessment tax return is more easily completed.

3. Don’t forget UK income

If you have any UK based income – for example, rental income from a former home – then you must count this in your self-assessment tax return. My company has recently helped a 93-year-old Jersey resident who owned a property in Worthing which is now rented out.

Given his place of residency, he is entitled to double taxation relief and received that in 2020. However, he received a letter from HMRC, two days before the self-assessment deadline, to say that he needed to submit a tax return on the rental income he makes from the Worthing flat.

4. Use technology

Bill took advantage of our technology to quickly and painlessly complete his tax return. There’s no denying that HMRC forms can be difficult to navigate, but there are many tools available to help you work out what you need to report. You will need to use a tech tool once Making Tax Digital for Income Tax comes into force in April 2024, so it make sense to start this process now so you understand the approach in future.

Tax can be a minefield for expats, but by tackling it head on they can make the process easier to manage.

You may find these related articles useful:

• Ditch The Jargon – UK Self-Assessment Explained
• What April 2022 UK Tax Changes Should Expat Landlords Know About?