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
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
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
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