Find out whether you need to pay tax in the UK and at what level.
Yes, even if you do not currently have any income, it may be useful for you to let the tax office know your circumstances. You can do this via a P85 form, issued from HM Revenue and Customs.
If you are going to be living and working in the UK you will usually have to pay tax here as well. However, if you have income which is from a foreign country and is taxed in that country, you may be entitled to an exemption from paying tax in the UK when there is a double taxation agreement in place. Some double tax agreements also allow teachers, professors and in some cases researchers, to come to the UK for a period of 2 years or less and be exempt from UK tax on their earnings from their teaching or research post. As the terms of double taxation agreements can vary widely, you are advised to refer to the text of the relevant agreement in HMRC’s Double Taxation Relief Manual. You can find out more about residency and your liability for tax on the Directgov website, in the HM Revenue and customs leaflet IR20, or at your local tax office.
The most probable types of tax that you will have to pay are:
There are other types of taxes, such as inheritance tax and taxes on goods and services. For more information visit the Directgov pages on tax
Under most double taxation agreements, if you are visiting the UK solely for the purpose of full-time education or training, you will not pay tax on payments from outside the UK for your maintenance, education or training. Therefore PhD students would not normally have to pay tax on their grants from outside the UK. However, if you are a post-doctoral researcher, you will probably have to pay tax in the UK, unless there is a specific agreement between the UK and your home state exempting you from paying tax on your income from your research post.
Postdoctoral researchers may be engaged:
Some double taxation agreements also provide that students or apprentices coming to this country for limited periods will be exempt from UK tax on certain earnings from employment here. It is best to check the relevant double taxation agreement.
The amount of income tax you have to pay depends on how much you earn.
For the tax year 20014/2015 the first ₤10,000 that you earn is tax free (personal allowance), and after that you must pay tax at different levels. For the 2015/2016 tax year, the personal allowance is £10,500.
The personal allowance is different for blind people and the elderly. For more details on income tax allowances and tax bands, visit the HM Revenue and Customs website.
The tax year runs from 6 April to 5 April. If you come to settle in the UK in the middle of a tax year you will often only have to pay tax on income from the moment that you arrive, but there are exceptions to this. Find out more at the Direct Gov website.
If you are employed, income tax and national insurance contributions will be automatically deducted from your salary (Pay As You Earn: PAYE), and you will not normally need to fill in a tax return each year. If you are self-employed, or have a substantial income from property or other means (for example foreign income), you will need to fill out a self assessment tax form. When you inform HM Revenue and Customs of your circumstances, they should determine whether you need to fill in a self assessment form, and will give you guidelines on how to do this.
You pay national insurance contributions (NIC) to build up your right to social security, benefits and a pension. NIC are automatically deducted from your wages or will be calculated from your self assessment tax return. For more information about National Insurance visit Directgov