Payment of the remittance basis charge

Produced by Tolley

The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Payment of the remittance basis charge
  • Remittance basis charge
  • Repayments of the remittance basis charge
  • Payments on account
  • How to make the payment
  • Electronic payment
  • Payment by cheque
  • Payments for professional services

Payment of the remittance basis charge

Remittance basis charge

The remittance basis charge is an annual charge payable by ‘long-term’ UK residents for the privilege of claiming the remittance basis.

Taxpayers who wish to utilise the remittance basis (but do not qualify for it automatically) must pay one of the following charges:

  1. £30,000 per year where the taxpayer has been resident in the UK for at least seven out of the last nine years

  2. £60,000 per year once the taxpayer has been resident in the UK for at least 12 out of the last 14 tax years

ITA 2007, s 809C

Note that the £90,000 remittance basis charge was abolished with effect from 6 April 2017.

The remittance basis is discussed in the Remittance basis ― overview guidance note and the remittance basis charge is covered in the Remittance basis ― formal election guidance note.

The Payment of tax due under self assessment guidance note discusses the various options available to the taxpayer to pay their self assessment tax liability.

The remittance basis charge is part of that self assessment tax liability, but is worth considering separately, as payment of the charge from an overseas bank account is not considered to be a remittance of income or gains if:

  1. the payment is made to cover the remittance basis charge, and

  2. the payment is paid direct to HMRC from the overseas account (by cheque or via electronic transfer)

ITA 2007, s 809V

The transfer of funds from an overseas account to a UK account to pay the tax does not meet these conditions and so will be treated as a remittance.

If the above conditions are met, then as this is not considered to be a remittance, the payment can be made from the nominated account (if necessary) without triggering the punitive ordering rules that govern remittances from nominated accounts. However, given the draconian remittance ordering rules that could be triggered if the remittance basis charge were to be repaid by HMRC (see below), it is

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