Share this content

Maximum amount of withholding tax deduction

Didn't find your answer?

The company has made a profit for 2019-2020. At that time company also paid withholding tax in Poland. (Tax = 200 GBP, WHT = 300 GBP) The tax was to be covered by WHT. The company received a letter of unpaid tax last month.

HMRC explains that: "The latest notes advise - the amount claimed for IT at source appears to be withholding tax so cant be claimed as IT at source its DTR, so correct claim has to be made Dir will need to review the DTR rules and can only claim a max of the UK liability. Here is some guidance: https://www.gov.uk/hmrc-internal.../double-taxation-relief And from what the team have advised. You would need to review the rules above as the claim exceed the maximum amount"

Has anyone had this situation? Does anyone know what the maximum deduction is?

Replies (9)

Please login or register to join the discussion.

My photo
By Matrix
08th Dec 2021 19:48

£200?

Thanks (0)
Replying to Matrix:
avatar
By Violettine235
09th Dec 2021 09:45

Are you able to say where I can find detailed information about it?

Thanks (0)
avatar
By Paul Crowley
08th Dec 2021 20:05

Does not make sense
Sounds to me as if you have been scammed

What organisation claims that extra tax is due?

Trouble is the facts you give are totally inadequate. Does the deduction agree to tax treaty?

Are you operating in the UK for UK taxpayers ?
Do you have PII?
If not get some soonest

Thanks (0)
Replying to Paul Crowley:
My photo
By Matrix
08th Dec 2021 20:13

Don’t worry Paul, the WHT was clearly entered as income tax in error.

Thanks (0)
Replying to Paul Crowley:
avatar
By Violettine235
09th Dec 2021 09:45

There is a possibility of such a deduction. However, I do not know the maximum amount.
I work in the UK. Then, however, I issued an invoice and paid tax in Poland.

Thanks (0)
avatar
By Tax Dragon
08th Dec 2021 20:29

I love that you can't even be bothered to type in the link in full.

What makes this company liable to UK tax? What's the income/profit?

Thanks (0)
Replying to Tax Dragon:
avatar
By Violettine235
09th Dec 2021 09:44

It is a LTD company that has to account for HMRC. The profit was around 1 000 GBP

Thanks (0)
Replying to Violettine235:
avatar
By Tax Dragon
09th Dec 2021 10:35

I meant what type of income or profit.

Business profits of a UK enterprise are taxable only in the UK unless the enterprise carries on business in Poland through a permanent establishment there. Article 7 of the DTA. If it's not a business profit, read the relevant article.

https://www.gov.uk/government/publications/poland-tax-treaties

Cathygrimmer summarises it nicely.

Thanks (0)
avatar
By cathygrimmer
09th Dec 2021 09:50

If the company could pay no WHT or a lower rate under the UK/Poland DTA, then the relief will be restricted to that (and the non-relievable WHT should be recovered from the Polish authorities. Not sure that's what it is saying as it refers to the maximum of UK liability - but it could just be explained incorrectly?

Thanks (0)
Share this content