**Use the actual Japanese income tax paid—about 3% in your case—not 10%**, assuming that tax was properly due and the same earnings are taxable in the UK.

“Allowed by treaty” is a **limit**, not an alternative amount you can elect to claim. Your credit is the smallest of:

- The qualifying foreign tax actually paid.
- Any treaty ceiling applicable to that income.
- The UK tax attributable to the same income.

HMRC explains that a treaty can reduce the credit where foreign tax paid exceeds the treaty limit. It does not increase the credit where you paid less. [HMRC helpsheet HS263](https://www.gov.uk/government/publications/calculating-foreign-tax-credit-relief-on-income-hs263-self-assessment-helpsheet/relief-for-foreign-tax-paid-2023-hs263)

There is also a distinction relevant to your question: **the UK–Japan treaty does not impose a general 10% rate on employment income.** Article 14 covers wages earned by working in Japan and allows Japan to tax them, subject to its exceptions. The treaty’s 10% dividend rate concerns a different type of income. Article 23 provides UK credit for Japanese tax payable in accordance with the treaty. [UK–Japan treaty, Articles 10, 14 and 23](https://www.gov.uk/government/publications/japan-tax-treaties/2006-uk-japan-double-taxation-convention-as-amended-by-the-2013-protocol-in-force)

For example, if your Japanese earnings were £10,000, qualifying Japanese tax was £300, and UK tax attributable to those earnings was £2,000, your credit would be **£300**.

Use the actual tax amount converted to sterling, rather than an approximate percentage, and check any Japanese year-end adjustment or refund. Being registered as a UK sole trader does not by itself establish UK tax residence or whether those Japanese earnings are UK-taxable.