RDRM32430 - Remittance Basis: Accessing the remittance basis: Remittance Basis Charge - Nomination of foreign income and gains: Claim to reduce Payments on Account (PoA)
Source: gov.uk (2025-04-07)


From 6 April 2025 it is not possible to use the remittance basis of taxation, however, any foreign income or gains that have arisen to a former remittance basis user prior to this date will continue to be taxed at the usual tax rates if they are remitted to the UK on or after 6 April 2025, subject to any amounts designated under the temporary repatriation facility (TRF) – see RDRM71000 (https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm71000).

The guidance in this section only applies to tax years up to and including the 2024-25 tax year and remains for reference purposes only.

Stages 1 through 3 and example 1 show the remittance basis charge (RBC) as £30,000 which was correct for the years mentioned in them. Example 2 gives details of the new higher charge of £50,000 which came into effect from 6 April 2012 for those individuals who met the revised criteria.

Stage 1 (#IDAEABPG)

Stage 2 (#IDAQABPG)

Stage 3 (#IDA2ABPG)

Example 1 (#IDAMBBPG)

Example 2 (#IDAPCBPG)

The payment on account (PoA) position in relation to the remittance basis charge will be affected by any claims to reduce payments on account.

Where the RBC is paid in the previous year on nominated income, the amount feeds through to the individual’s payments on account (PoA) for the next year, unless the individual makes a claim to reduce their PoAs on the grounds that their income tax liability for that year will be less than the sum of the two PoAs.

For example this could be because they will not claim the remittance basis for the following year. If they subsequently do claim the remittance basis and pay the remittance basis charge in the following year and the income tax due for that year exceeds the sum of the PoAs made HMRC will charge interest on the reduction in the PoA.

This is shown in the example below:

Stage 1

The return shows liability to income tax, which includes the RBC, partly or fully paid in respect of nominated income. The payments on account due on 31 January and 31 July are half of the relevant amount of income tax (TMA70/s59A).

For example, Marie-Clare’s 2008-2009 income tax liability is £55,000, of which £25,000 related to tax on UK source income, and the remainder is the £30,000 RBC (all in respect of nominated foreign income). Nothing is taxed at source. Her payments on account for 2009-2010, payable on 31 January 2010 and 31 July 2010 will each be £27,500.

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Stage 2

If the individual does not intend to use the remittance basis for the following year, and so they will not be subject to the remittance basis charge, they can claim to reduce the PoAs.

In the Marie-Clare example, if she does not think she will claim the remittance basis and so will not need to pay the remittance basis charge for 2009-2010 she could reduce her payments on account for 2009-2010 to £12,500 each, that is 50% of her 2008-2009 income tax liability of £25,000 (if the remittance basis charge is excluded). She will of course still have to consider her other income sources and overall expected income tax liability for the year in making this decision.

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Stage 3

If the individual subsequently decides to claim the remittance basis and to pay the £30,000 remittance basis charge and a claim to reduce payments on account has been made which resulted in insufficient PoAs being made, then interest will be charged from the due date for the payments on account until a claim to increase payments on account is made or payment is made for the year is paid to stop interest accruing (TMA70/s86).

In the Marie-Clare example, she has claimed to reduce her payments on account to omit the remittance basis charge, so she only makes payments on account of £25,000 (two lots of £12,500). When she files her 2009-2010 self-assessment return her UK income has remained, as expected, at £25,000. However she now decides to claim the remittance basis and so she has to pay the remittance basis charge. As she has erroneously claimed to reduce her payments on account in the year, she will be charged interest on the payments that she should have made, that is, on £15,000 from 31 January 2010 and £15,000 from 31 July 2010 until the date these amounts are paid.

Refer to Self-Assessment Manual - Legal Framework SALF303 for further information on claims to reduce payments on account.

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Example 1
- Eva claimed the remittance basis and paid the remittance basis charge in 2008-2009, and her income tax liability produces two payments on account for 2009-2010 of £120,000 each.
- Eva has decided that she will not be claiming the remittance basis in 2009-2010 so will not pay the remittance basis charge. Eva makes a claim to reduce the amount due on account of her tax liability to £200,000 due to a drop in income and because she will not pay the remittance basis charge in 2009-2010.
- When Eva files her 2009-2010 return in September 2010 it shows that the tax due on income is £200,000, but these are provisional figures as Eva is awaiting some details from her foreign bankers in relation to some foreign transactions.
- The two £100,000 payments on account appear ‘correct’ at this stage.
- In November 2010 Eva receives the information from her foreign bankers and decides to amend her return and to claim the remittance basis. She nominates some foreign income and has to pay the remittance basis charge of £30,000, all constituting income tax, bringing her total liability to £230,000.
- Eva will be charged interest on the £30,000 reduction in her payments on account on the grounds that she should not have reduced them.
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Example 2
- Vali had no foreign income or gains arising in 2010-2011, so he did not claim the remittance basis and so he did not need to pay a remittance basis charge in 2010-2011.
- Vali’s income tax liability for 2010-2011 produces two payments on account of £200,000 for 2011-2012. No claim is made to reduce the payments on accounts.
- When Vali begins to prepare his 2011-2012 return he has a liability of £420,000 income tax on UK sources, so his £400,000 payments on account were correct, based on Vali’s previous year’s income tax liability.
- Vali has foreign income arising in 2012-2013 and he decides to claim the remittance basis in his 2012-2013 return. As a long-term but non-domiciled resident Vali has to pay the remittance basis charge of £50,000 (he has been resident in the UK for at least 12 of the last 14 tax years), bringing his total liability to £470,000. Interest will not be charged on the additional £70,000 tax due, as long as this is paid by the proper due date.
Where an individual claims the remittance basis one year and then the following year opts for arising basis, they would need to consider their payments on account. The following examples illustrate this.

Example 3 (the rates used in this example are for illustrative purposes only)
- In 2012-2013 Andreas has UK income of £20,000 liable at 20% and pays the remittance basis charge of £50,000. This produces payments on account of £27,000 each for 2013-2104.
- Andreas' expected liability for 2013-2014 is UK income of £30,000 liable at 20%, foreign income of £70,000 liable at 20% and £80,000 liable at 40%. Giving a total of £52,000.
- This is less than the original payments on account and so a claim to adjust is acceptable, with the revised payments on account being £26,000 each.
- If, once the return was submitted the actual liability exceeded £52,000, then the payments on account would be adjusted to what they should have been, and interest would be charged on the part paid late.
Example 4 (the rates used in this example are for illustrative purposes only)
- For 2012-2013 the scenario is identical to example 3
- For 2013-2014 Andreas' expected UK liability is UK income £30,000 liable at 20%, chargeable gain £70,000 liable at 10%, foreign income £70,000 liable at 20% and £80,000 liable at 40%. Giving a total of £59,000.
- In this scenario a claim to adjust should not be made as the expected liability exceeds the total amounts of the payments on account. Even though the remittance basis charge is no longer payable, the tax due on the additional income and gains exceeds the tax saving from not having paid the remittance basis charge.