A UK resident who sits on the board of a foreign company is taxed in the UK on the fees as employment income, wherever the meetings take place and wherever the money is paid. The company’s own country usually has the right to tax the fees too, so the UK gives relief by crediting the foreign tax against the UK tax on the same fees, up to the amount of that UK tax, and only for tax correctly due under any treaty.

Are fees from a foreign company taxable in the UK?

Yes, if you are UK resident. A directorship is an office, and section 5 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) applies the employment income rules to offices and office holders. Section 15 then taxes the full amount of general earnings for any tax year in which the employee is UK resident. The only carve out is for a split year, where earnings attributable to the overseas part are excluded unless they relate to UK duties. HMRC’s Employment Income Manual at EIM40004 gives the example of a London based sales manager who travels across Europe: all of her earnings are chargeable under section 15 because she is resident.

The location of the company, the currency of payment and the bank account the fees are paid into make no difference to the UK charge. From 6 April 2025 there is also no remittance basis to keep them offshore. A person in their first four years of UK residence after at least 10 years abroad cannot use a foreign income claim for employment income, but may be able to elect for overseas workday relief on earnings for duties performed outside the UK, capped at the lower of 30% of the relevant employment income and £300,000 a year (EIM43600).

Can the company’s country tax the fees as well?

Usually, yes. HMRC’s International Manual at INTM153180 explains that under the directors’ fees article in most UK treaties, a resident of one country who is a director of a company resident in the other may be taxed in that other country on their fees. The article covers income received as a member of the board. Earnings received in a separate capacity as an employee, for example as an executive with a day job, fall under the employment article instead. INTM153180 also notes that the short term business visitor exemption in the employment article does not help with directors’ fees, and that in a few treaties the rule sits inside the employment article rather than in a separate one.

The directors’ fees article gives the company’s country a right to tax, not an exclusive one. The UK, as your country of residence, still taxes the fees and relieves the double charge. Our page on how double tax treaties work explains the structure.

How does the UK give relief for the foreign tax deducted?

The usual route is foreign tax credit relief. HMRC’s helpsheet HS263 sets the rule: the credit is the lower of the foreign tax paid (or the amount the treaty allows) and the UK tax on that income. The UK tax on the fees is found by working out your total UK tax with the fees and without them; the difference is the ceiling. The credit can only reduce UK tax on that item and can never exceed it.

Two limits catch people out:

  • Minimum foreign tax. Credit is allowed only for tax that is properly due under the foreign law and, where there is a treaty, payable in line with it. You must take all necessary steps to reduce the foreign tax to the minimum, including claiming treaty reliefs and foreign allowances. If you do not, HMRC allows credit only for what would have been payable after a successful claim (INTM161250).
  • Item by item. HS263 requires a separate calculation for each source. Excess foreign tax on the fees cannot be used against UK tax on other foreign income.

Where you have no UK liability in the year, for example because of losses, HS263 allows deduction relief instead: the foreign tax reduces the taxable amount rather than the tax bill.

How are the fees reported?

A foreign company with no UK payroll will not operate PAYE or give you a P60. The SA106 notes for 2025 to 2026 say that foreign employment income goes on the Employment pages of the Self Assessment return, and the Foreign pages are used only to claim credit for the foreign tax. Where the foreign employer has no UK payroll, the gross income must be reported on the Employment page. The figure claimed must be the minimum foreign tax due after all deductions, exemptions, reliefs and allowances. If you have not filed before, see registering for Self Assessment.

PAYE can still arise in some cases. HMRC’s PAYE Manual at PAYE81501 notes that Part 11 of ITEPA 2003 has special rules, including section 689 for employees of a non UK employer, that adapt PAYE where the employer has no UK presence.

What about National Insurance?

National Insurance follows separate rules. Under regulation 145(1)(b) of the Social Security (Contributions) Regulations 2001, an employer is liable for secondary Class 1 contributions only if it is resident or present, or has a place of business, in Great Britain; HMRC’s guidance at NIM33510 lists evidence such as a UK registered office, premises or a UK bank account. If the foreign company meets none of these, someone else may be treated as the secondary contributor. Social security agreements with the company’s country can also decide which system applies. See National Insurance when working abroad.

What does a credit claim look like?

Illustration only. Priya lives in England and has a UK salary of £45,000 taxed under PAYE. In 2026 to 2027 she also receives £20,000 of fees as a non executive director of a company resident in Country X, which taxes them under its own law and deducts £5,000; the treaty’s directors’ fees article lets Country X tax them. Using the 2026 to 2027 rates for taxpayers outside Scotland (personal allowance £12,570, 20% to £50,270, 40% above):

  • Tax on total income of £65,000 is £13,432.
  • Tax on the salary alone is £6,486.
  • UK tax on the fees is therefore £6,946.
  • Credit is the lower of £5,000 and £6,946, so £5,000.

She reports the gross £20,000 on the Employment pages, claims £5,000 on the Foreign pages and pays the remaining £1,946 through Self Assessment. Had Country X taken £9,000, the credit would still be capped at £6,946. Any tax deducted beyond what Country X’s law and the treaty actually require would get no credit at all.

What if the fees are paid to my company?

Directors’ fees are normally the individual’s income. HMRC’s Business Income Manual at BIM40351 describes the arrangement in Extra Statutory Concession A37 under which fees received by a professional partnership, or by a company with a right to appoint a director, can be taxed on the firm or company instead. The conditions are strict and are covered on our page on paying director fees to a company.

What mistakes come up?

  • Leaving the fees off the return because foreign tax was deducted.
  • Claiming credit for foreign tax that was not properly due instead of reclaiming the excess abroad.
  • Putting the income only on the Foreign pages, without entering it on the Employment pages.
  • Assuming a FIG claim covers employment income; it does not.
  • Treating executive salary from the same company as directors’ fees, when a different treaty article applies.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.