As the self-assessment deadline looms, HMRC has issued an urgent call for taxpayers with foreign income to act now to avoid overpayment or missed opportunities for tax relief. Experts stress the importance of addressing potential issues promptly to prevent fines and financial strain.
With increasing numbers of individuals earning income from overseas, HMRC’s guidance aims to simplify the complex landscape of double taxation. This warning comes as the January 31 deadline approaches, putting millions of taxpayers on high alert.
Tackling the Complexities of Double Taxation
Despite its strength, the UK tax system poses difficulties for people who earn money abroad. Taxpayers may be able to obtain relief under double-taxation agreements in order to avoid paying taxes on the same income in two different nations. However, as tax adviser Andy Wood of Tax Natives says, comprehending and interpreting these agreements calls for close attention to detail.
“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.” said Wood. “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.”
HMRC has developed a range of online resources to assist taxpayers, including a dedicated section on “if you’re taxed twice.” However, Wood advises that professional guidance can be invaluable in ensuring compliance with international tax laws. “Whether it’s understanding the terms of agreements or completing the necessary documentation, expert advice can help avoid costly errors,” he added.
The Consequences of Missing the Deadline
Failing to file a self-assessment tax return by January 31 carries significant repercussions, including penalties and potential overpayment of taxes. HMRC imposes an initial £100 fine for late submissions, with additional charges accruing over time. For taxpayers with foreign income, the stakes are even higher.
“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.” said Wood. “Whether it’s foreign income or something else, sorting your taxes now can save you from overpaying or getting fined later. ”
The possibility for financial stress brought on by last-minute preparations is another point of emphasis in HMRC’s warning. To prevent needless hassles, taxpayers are advised to examine their foreign income, assess their eligibility for relief, and complete their returns as soon as possible.
HMRC is stressing the significance of taking prompt action as the deadline is only a few days away. Together with the knowledge of tax experts who can give specialized assistance, the department’s resources offer a crucial place to start for individuals who are unsure of where to start.
HMRC advises taxpayers with foreign earnings to prepare ahead of time in order to prevent double taxation and late fees, as well as to assure compliance.
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