Foreign Income: A Guide for Creatives Based in the UK

Apr 3

5 min read

For singers, artists, influencers, and performers based in the UK, earning money from overseas gigs, sponsorships, streaming royalties, or sales is becoming more common. Whether you are touring internationally, working with foreign brands, or selling artwork globally, you need to correctly account for foreign income when filing your UK tax return.

Understanding how to report foreign income, avoid double taxation, and stay compliant with HMRC is essential to ensure you are not overpaying tax or facing unexpected penalties.

Here’s a complete guide on how to handle foreign income as a UK-based creative professional.

1. What Counts as Foreign Income?

Foreign income includes any money earned outside the UK, such as:

Live performances, gigs, or tours overseas – Fees paid for international concerts or shows
Royalties from international streaming platforms – Payments from Spotify, Apple Music, YouTube, or book publishing
Brand deals and sponsorships from foreign companies – If a non-UK brand pays you for promotion
Sales of artwork, music, or merchandise to overseas customers – Income from platforms like Etsy, Bandcamp, or Redbubble
Freelance commissions from international clients – Work paid in foreign currencies
Appearance fees or speaking engagements abroad – Earnings from international events, panels, or exhibitions

If you receive any of these payments while being a UK tax resident, you are required to declare them to HMRC.

2. Do You Have to Pay UK Tax on Foreign Income?

As a UK tax resident, you are generally taxed on your worldwide income. This means:

You must report foreign income on your UK tax return, even if it was earned while abroad
If tax was already deducted overseas, you may be able to claim foreign tax credit relief to avoid double taxation
If you are working abroad for an extended period, your tax residency status may change (see below)

3. How to Report Foreign Income to HMRC

You must include all foreign income on your Self-Assessment tax return. Here’s how:

Convert the income into GBP – Use the exchange rate on the date of the transaction (or HMRC’s yearly average exchange rate)
Enter the income under "Foreign Income" – Report the total amount earned abroad in the appropriate section of your Self-Assessment tax return
Declare any foreign tax already paid – If tax was deducted in another country, include it so HMRC can calculate whether you are eligible for tax relief

If your foreign income was earned through self-employment, include it in your Self-Employed (SA103) section along with your UK earnings.

4. What If You Paid Tax Abroad? (Double Taxation Agreements)

If you paid tax in another country, the UK has Double Taxation Agreements (DTAs) with many nations, which means:

You may not have to pay tax twice on the same income
You can claim Foreign Tax Credit Relief, reducing your UK tax bill
The amount of relief depends on the agreement between the UK and the country where you earned the income

To claim Foreign Tax Credit Relief, you will need:

A statement of tax deducted from the foreign country
Details of your earnings and payments made abroad
Exchange rate calculations to show the GBP equivalent

HMRC may request additional proof of foreign tax payments, so keep all official tax documents from overseas clients, venues, or agencies.

5. How to Handle Foreign Currency Transactions

Foreign income is often received in euros, dollars, or other currencies, making tax reporting more complex.

How to track and convert foreign income:

Use the exchange rate on the date you received the payment
If you receive regular payments, you can use HMRC’s annual exchange rate instead of tracking individual transactions
If using accounting software like Xero, FreeAgent, or QuickBooks, many platforms automatically convert foreign payments to GBP

6. Do You Need to Register for VAT on Foreign Income?

If your total taxable income (UK and foreign) exceeds £90,000 per year, you may need to register for VAT.

Selling to EU customers – Digital products (like music downloads, online courses, or e-books) may require VAT registration in the EU under the VAT One Stop Shop (OSS) scheme
Working with foreign brands – If a non-UK company asks for a VAT invoice, check whether reverse charge VAT applies

For VAT-related foreign income queries, it is best to consult a tax professional.

7. What If You Spend a Long Time Working Abroad? (Tax Residency Rules)

Your tax situation could change if you spend a long period working overseas.

If you spend more than 183 days in another country in a tax year, you may become tax resident there instead of the UK
Some countries require non-residents to file local tax returns, even for short-term work
The UK has tax treaties that determine which country has taxing rights over your income

If you tour or work internationally for extended periods, check the Statutory Residence Test (SRT) or speak to an accountant (like us!) to ensure you are meeting the correct tax obligations.

8. Keeping Records of Foreign Income

To avoid HMRC disputes or penalties, keep accurate records of all overseas earnings.

Invoices and payment confirmations from international clients
Bank statements showing foreign payments received
Tax documents from other countries (if tax was deducted abroad)
Exchange rate calculations for converting foreign earnings to GBP

Keeping organised records ensures that you can claim tax relief where available and avoid overpaying UK tax.

9. What If You Earn Through an Overseas Company?

If you are paid via a foreign company or agency, check:

Whether they deducted tax at source (some US agencies withhold 30 percent tax, for example)
If you need to submit a tax form to reduce withholding tax (such as the W-8BEN form for US income)
Whether you are required to file a foreign tax return in addition to your UK return

If you regularly receive payments from abroad, an accountant can help ensure you are not overpaying tax unnecessarily.

Final Thoughts: Stay Compliant and Avoid Double Taxation

Earning money overseas is an exciting step in your career, but it comes with tax responsibilities.

Report all foreign income on your UK tax return
Convert payments into GBP correctly and keep records
Check tax treaties to avoid double taxation and claim relief if eligible
Understand VAT rules if selling digital products or working with international brands
Track residency status if spending significant time abroad

By staying organised, you can pay the correct tax, claim the right reliefs, and maximise your earnings—ensuring you keep more of what you earn while staying compliant with HMRC.

If you're ever in need of help with setting up a limited company, sorting out your bookkeeping, accounting and tax submissions or would like some personal financial coaching, drop us a line by clicking on the 'Contact Us' button at the top of the page and we'll be happy to help.