Following on from our previous blog on TANs, we follow up with further information on what should happen with them.
All figures should be verified on the TAN including checks to ensure all allowances claimed on the tax return have been granted, Norwegian National Insurance has not been charged incorrectly and that the correct proportion of personal allowances have been granted. If any mistakes are found an appeal should be lodged as soon as possible. This can normally be done online but can also be done by a paper appeal. Once the issue has been resolved, a revised TAN will be issued.
The final TAN is the evidence that is required to claim credit in the UK for the Norwegian tax paid. Due to the double tax treaty between the UK and Norway, UK resident employees should pay less tax in the UK because they have paid Norwegian tax. However, the claim to reduce the amount of UK tax due has to be made on the UK tax return.
Generally, a claim may be made up to the value of the Norwegian tax paid but HMRC will only allow a claim to be made for all of the Norwegian tax paid if the Norwegian tax is less than the UK tax and all steps have been taken to ensure the amount of Norwegian tax paid has been mitigated. Therefore, if an employee does not, for instance, claim all the allowances he is due in Norway; HMRC may disallow part of the claim for Norwegian tax credit.
Finally, although the TAN reports Norwegian tax prepaid, it also includes in the reporting any Norwegian National Insurance payments. These are considered a “tax” in Norway. If Norwegian National Insurance has been paid, it is important that this is identified separately on the TAN and the amount is not claimed as a credit to reduce the amount of UK income tax due.
Should you require any assistance or have any questions relating to your TAN or how to report on your UK tax return, please contact Kris Walker (Kris.Walker@aab.uk) or your usual AAB contact.