Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust. Or you can check out our online calculator to see if you could be due a refund.
When do you have to pay UK tax?
If you come to live in the UK, you will have to pay tax on any income you have. By income, HMRC means:
- Wages you earn
- Certain state benefits you receive
- Taxable benefits you might receive from your employer
- Your pension, if you receive one
- Interest on your savings
HMRC stands for HM Revenue and Customs, who are the government department who are tasked with collecting taxes in the UK.
You will get a tax-free Personal Allowance, currently set at £11,850 for tax year 2018/19, and you will have to pay Income Tax on any income you receive which is over that amount. Tax years run from 6th April to 5th April the following year.
If you only make short business trips to the UK, for example, to attend meetings or training courses, you won’t be expected to pay UK Income Tax.
How do you pay tax in the UK?
The most common way to pay tax in the UK is through the Pay As You Earn (PAYE) system, where your employer or pension provider deducts the tax you owe automatically from your income.
However, if you are self-employed or have other forms of UK income, you will have to register for Self Assessment and send a Self Assessment tax return to HMRC.
There are other circumstances which would mean you have to send a Self Assessment tax return. These include making a profit from selling certain assets, such as shares or second homes.
If you have to pay UK tax on foreign income you may also have to send a Self Assessment tax return. For example, if you have an overseas pension, let out property overseas or have savings in an overseas account – although this will depend on whether you are classed as a UK resident. If you have lived in the UK before, you may be expected to pay tax on any income you made in the UK while you were living abroad.
What about National Insurance?
If you work in the UK, you will usually be expected to pay National Insurance on your income. How you pay will depend on whether you are employed by an employer or self-employed.
You will need to apply for a National Insurance number if you want to work in the UK or claim state benefits. To do this, you will have to be able to prove you are entitled to work in the UK.
You won’t need to pay National Insurance or get a National Insurance number if any of the following apply to you:
- You have a Portable Document A1, E101 or E102, which proves that you pay National Insurance in another EEA (European Economic Area) country.
- You have a certificate from a country which has a bilateral agreement on social security with the UK. To obtain these certificates, you would need to ask the social security department in your country.
Countries which currently have a bi-lateral agreement with the UK are:
- Bosnia and Herzegovina
- Isle of Man
- Republic of Korea
You won’t be expected to pay National Insurance for the first 52 weeks of working in the UK if both of the following apply:
- You are sent by an employer in your home country to work in the UK
- You come from a country which isn’t part of the EEA or doesn’t have a bi-lateral agreement with the UK.
What if you are also being taxed abroad?
It is possible you will be taxed twice on the same income or gains, unless the country you have come from has entered into a double-taxation agreement with the UK to prevent this from happening.
What happens if you have paid too much UK tax?
If you are only going to be working in the UK for a short time and plan to leave, you can claim tax relief or a tax refund of any tax you have paid.
If you are a foreign national assigned to the UK and you think you have paid too much tax, you can claim a tax refund.
How can DSR Tax Claims help?
We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful. Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax rebate. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.
This page was last updated on 26/10/2018.