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Hi, welcome to JustAnswer. I'm [email protected], a UK-Qualified Chartered Certified Accountant with over 15 years of experience. I'll be answering your question today.
Are you familiar with both UK and Portuguese tax laws?
As a UK resident, all overseas income must be declared on your self assessment tax return under the "Foreign" income section.
You will declare the amount earned and tax paid on it in Portugal
You will also put an X in the box that says "Claim Foreign Tax credit relief". Once the return is submitted, HMRC will assess your circumstances and issue a releif under the double taxation treaty.
The letter you have received is generally issued to everyone who has overseas income that has not been declared in the UK
I hope I've answered your question? If, however, any part of my response is unclear, please do let me know and I'll try to explain it further.