C5.8 Tax Matters After Moving to the UK

Tax Issues When Coming to the UK (202510)

Official Link: https://www.gov.uk/tax-come-to-uk

1. Tax Liability After Arriving in the UK

If you come to the UK to live, work, or study, you need to pay Income Tax on your income. Taxable income includes:

• Salaries and wages

• Benefits

• Pensions

• Savings interest

• Self-employment income

• Rental income from property

Reminders:

• You only pay Income Tax on income above your Personal Allowance.

• If you make a profit from selling (or "disposing of") certain assets (e.g., shares, a second home), you may need to pay Capital Gains Tax—only on profits above the annual exempt amount.

• If you have lived in the UK before, you may still need to pay tax on UK income or gains earned during that period, even if you now live abroad.

• If you are only visiting the UK short-term (e.g., for business or holidays), you do not need to pay UK tax.

2. How to Pay Tax

• Employed work: Your employer will deduct Income Tax directly from your salary (PAYE).

Situations requiring a Self Assessment tax return:

• You are self-employed.

• You have other UK income (e.g., pensions, savings interest, rental income).

• You made a profit from selling certain assets (e.g., shares, a second home).

• You need to pay UK tax on foreign income (e.g., overseas pensions, savings interest from overseas bank accounts, rental income from overseas property).

• If you are unsure whether you need to submit a return, you can check online.

3. Tax on Foreign Income

Whether you need to pay UK tax on income from outside the UK (foreign income) depends on whether you are a UK "resident". (If unsure about your residency status, you can check for yourself.)

• Non-UK residents: No UK tax on foreign income.

• UK residents:

• Generally, you need to pay UK tax on foreign income.

• However, you may be exempt if eligible for the Overseas Workday Relief.

• If your permanent home (domicile) is outside the UK, foreign income received or earned before 6 April 2025 may be exempt from UK tax.

Double taxation:

If you have paid tax on the same income or gains overseas, you may be double-taxed unless there is a double taxation agreement between that country and the UK.

4. Overpaid Tax

• If you work in the UK for a short time and plan to leave, you can claim tax relief or a refund.

• If you are a foreign national seconded to the UK and believe you have overpaid tax, you can apply for a refund of the overpaid amount.

5. National Insurance

If you work in the UK, you generally need to pay National Insurance contributions. The payment method depends on whether you are employed or self-employed.

You need to prove to your employer that you have the right to work in the UK.

To work in the UK or claim benefits (including the State Pension), you need to apply for a National Insurance Number.

6. Situations Where National Insurance Is Not Required

You do not need to pay National Insurance or obtain a National Insurance Number if:

• You hold a certificate or document proving you are paying social security contributions in the EU, Iceland, Liechtenstein, Norway, or Switzerland.

• You hold a certificate from a country with a social security agreement with the UK.

Reminder: Contact your home country’s social security authority to find out how to apply for these certificates or documents.

7. When No Overseas Social Security Contribution Certificate Is Available

You are usually exempt from National Insurance in the UK for the first 52 weeks if both of the following apply:

• You are temporarily seconded to work in the UK by your employer from your home country.

• You are from a country outside the EU, Iceland, Liechtenstein, Norway, Switzerland, and there is no social security agreement between that country and the UK.

If you are unsure whether you should pay National Insurance in the UK, contact HM Revenue and Customs (HMRC) [https://www.gov.uk/find-hmrc-contacts/national-insurance-enquiries] or your home country’s social security authority