Tax Guide For Foreign Workers In The UK

Tax Guide For Foreign Workers In The UK

The UK tax system is a complicated lot. This is why foreigners who come to live and work in the UK must, at least, know the basics. So here’s some info that may be helpful for both New Zealanders and Australians in the UK.

All income earned in the UK, including benefits, savings interest, and pension, is taxable. The taxable amount is anything above your Personal Allowance. However, if that earning stems from a short business trip in the UK, it will be tax-free.

If you are an employee or self-employed in the UK, you will have to pay National Insurance (NI). This is especially true if you want to claim UK benefits, such as State Pension. The only exception is when you pay NI in another European Economic Area country, or when you hail from a country that has a bilateral agreement with the UK with regard to Social Security. You must have a certificate as proof.

How to Pay UK Tax As a Foreign National

Employed by Someone Else

As an employee, income tax is automatically deducted from your wages through the PAYE (Pay As You Earn) system. Your employer will be responsible for auto-deduction. How much tax you pay will depend on the amount above your personal allowance and your tax code.


If you are self-employed, you’re responsible for working out your self-assessment tax return. The same thing is true if you have other UK income from sources other than direct employment. Under the circumstances, you would have to complete a self-assessment tax form and send it to HMRC.

If you are considered resident in the UK for tax purposes, you may have to pay UK tax on foreign income. For example, an income earned from a property to let overseas is subject to UK tax. The same is true for overseas pension and savings in an overseas bank account.

Double Taxation Agreement

Foreigners that come from countries that have a double taxation agreement with the UK don’t need to be taxed twice. It’s either they pay UK or foreign tax, but not both.

Tax Relief

If you think you’ve paid too much tax for whatever reason, you can apply to claim back UK tax, even if you are a foreign national. You paid UK tax, after all. If you only work for a short period, and plan to leave, you can also claim tax relief.To claim back your overpaid tax click here

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