Applicable Taxes for Foreign Teachers in the UK
To teach in the UK, there are documents and requirements that you need to comply with. Although you can work as a foreign teacher, without a work permit, tax treatment will greatly vary. It also matters if you are a resident or non-resident in the UK for tax purposes, as your specific situation will determine if you can avoid double taxation.
As for deductions, how and on what items you can make a claim depends on your position. Based on EIM70720, for example, School Teachers can make a claim for expenses on books, sports clothing, travelling expenses and capital allowance for computers. University lecturers, on the other hand, can enjoy deductions on travelling, subsistence costs and other expenses incurred while doing their work, as specified in EIM70701. Suffice to say that tax treatment is a complex process that requires expert knowledge.
Overseas trained teachers are paid and taxed through the PAYE system. Employers are responsible for making relevant deductions and then paying it directly to HMRC. Under this arrangement, there is no need to complete a tax return.
How much is deducted from your gross salary?
It will be 20% when you earn up to £45,000, and 40% when you earn between £45,001 and £150,000.
PAYE Tax Refunds program insure that deductions are made automatically, along with your National Insurance contribution.
Can you apply for a personal tax allowance?
Yes, since nearly every UK resident is eligible for it. If it is your first job in the UK, you must complete from P46, a starter declaration form that you can get from your recruitment agency or umbrella company that you are under. Once it is completed, you will be given a temporary tax code by HMRC and the right amount of personal tax allowance. For the 2017/2018 period, standard amount is £11,500.
Foreign teachers in the UK can make claims to exemption under the Teacher Article, provided that they meet certain
- Identify the country that you are domiciled in prior to working in the UK. The rule does not look into whether or not you are a national of the said country.
- Purpose of the visit must be for teaching. If working as a teacher is only a subsequent decision, the rule does not apply. Other acceptable reasons is when you visit for research, and you were invited by a university, college and other academic institution.
- Work must be rendered in the UK.
- Length of the visit must not exceed 2 or 3 years, depending on the agreement, at which time a claim can be made. The only exception is when you state on the outset not to exceed the time limit.
All claims are subject to tax rules in both your home country and the UK. This is where Double Taxation Agreements become handy. According to DT1935, not all agreements contain an Article that exempts a teacher from UK tax earnings. In the case of foreign language assistants, articles are only made between the UK and Austria, France, Germany, Italy and Spain. Some articles have specific requirements, but the most common are the following:
- The language assistant must be a resident of the country that UK has an agreement with before they start employment. Otherwise, the exemption will not apply even if a teacher speaks French, German or Spanish.
- Length of stay must not exceed 2 years. There is different provisions for when a school or college extends employment.
- Earnings not connected to a language assistant post will be taxed the usual way.
With all the complexity that must be dealt with, seek professional assistance to get your income tax in order.