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Topic: ABC software filing self-assessment as non-resident strangeness.  (Read 1603 times)

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I am dual US/UK citizen and have primary home in US but was in UK long enough in 2019-2020 to trigger residency - so I got UK taxes filed ( by a pro)
I stayed in US for 2020-2021 so  was NOT UK resident last year but need to file anyway.

I though I would give ABC software a try to see if I could file myself but am surprised by what it is doing. Here is my test.

Started a new return
checked foreign pages, residence pages
Added 20,000 of USA foreign interest income
ABC shows £2800 owed at top of page
In Residence Pages I checked box 1 'not resident for 2020-21' but £2800 tax did not go away
When I set my country of residence as USA the tax reduced to £300 - NOT Zero!
I tried various residence boxes to make the tax go away and none did.

The only way I could make the tax go away was to claim it back using dual tax agreement boxes 20-22 and that was strange in that if I claimed say £500 then ABC said that HMRC owed me £200 ( 300 - 500)!

This process suggests that the way to make the tax go away is is to claim the US taxable amount back  which means I have to do the work to document the actual income(s) and taxes paid in US etc. Why it allows me to claim a refund from HMRC seems really strange.

I was expecting that no UK income and only US income would simply zero it out when I checked 'Not resident' ( not matter what country I was living in)

Is this the way it should happen or is ABC software  getting it wrong ?



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Re: ABC software filing self-assessment as non-resident strangeness.
« Reply #1 on: April 16, 2021, 03:00:40 PM »
I'm not familiar with this software, but to be honest the UK income tax system is so much more simple that the incredibly complex US system. Most people tend to complete their own self assessment returns on line directly using the HMRC portal - you can save your progress as you go along and it will calculate any tax owing before your final submission. It might be worth looking at this as a an alternative - without using bespoke software - you have to register with HMRC, but it's free.

if you're insistent on using software, HMRC has a list of approved suppliers here (ABC is on the list) https://www.gov.uk/government/publications/self-assessment-commercial-software-suppliers/self-assessment-online-commercial-software-suppliers  - I'd stick to using the bigger companies who have the skillset to deal with more complex situations.

A quick search of Companies House reveals that ABC has only 2 employees (both directors) - a healthy financial picture for the 2 owners - one being the software developer - quite likely they don't have the expertise to handle anything too complex.

https://www.gov.uk/self-assessment-tax-returns
« Last Edit: April 16, 2021, 03:08:13 PM by Smitch »


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Re: ABC software filing self-assessment as non-resident strangeness.
« Reply #2 on: April 16, 2021, 03:36:34 PM »
Unfortunately the HMRC portal will not accept a foreign address so I have to use 3rd party software.
I had always assumed that I was safe from any UK taxes if I was not resident that year ( except for rules about real property CG's which do carry over several years) so I was surprised by a simple test showing tax due.

My key question is: 
Why/when would  a  UKC non-resident pay any tax in UK if their income is generated offshore?


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Re: ABC software filing self-assessment as non-resident strangeness.
« Reply #3 on: April 16, 2021, 03:56:12 PM »
Simple - as a non-UK resident, you don't pay tax on your overseas income:

https://www.gov.uk/tax-foreign-income/residence

Second sentence:

Non-residents only pay tax on their UK income - they do not pay UK tax on their foreign income.

If your software can't handle such a simple situation, then maybe time to ditch the software?


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Re: ABC software filing self-assessment as non-resident strangeness.
« Reply #4 on: April 16, 2021, 04:47:03 PM »
Thanks - your link makes it very clear!


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Re: ABC software filing self-assessment as non-resident strangeness.
« Reply #5 on: May 01, 2021, 01:47:38 PM »
Update,

I sent an email  to ABC as soon as I saw the error in their logic and all I got was an automated reply. Heard nothing for weeks...
Today I tried  123Efiling sw and they handle this scenario properly.

So, I cannot recommend ABC - bad logic and zero customer service!

123Efiling looks promising and is only £12 to file.


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