Do international students pay UK tax?
There are some special tax and National Insurance rules that affect international students who come to the UK to study. Many students pay more tax in the UK than the law requires – this guidance aims to ensure that international students in the UK can understand the UK tax system so that they pay no more tax than is necessary. This page is for people who have a right to be in the UK or a right to study in the UK.
It is not possible to explain all of the immigration requirements for students. We recommend consulting the website of the UK Council for International Student Affairs to check the requirements for the country concerned.
Following the 2016 European Union (EU) membership referendum in the UK, on 29 March 2017 the UK provided notice to the European Council of its intention to withdraw from the EU under Article 50 of the Treaty on European Union. At the time of writing (in March 2019), the date and terms of the UK’s departure from the EU have not yet been finalised. Therefore, please note that the guidance below reflects the law as it applies before the UK’s departure from the EU.
We look at below:
There are a number of ways that international students may get financial support for themselves whilst studying in the UK:
- scholarships or bursaries;
- family gifts; or
- personal savings accumulated before arrival in the UK.
In most circumstances such support will not be taxable in the UK and can be ignored, but the following sections give a bit more information.
Many international students find work in the UK with a UK employer. If you do, then you will normally pay tax and National Insurance contributions on these earnings – see Can I work while studying in the UK?.
There are rare occasions where double taxation agreements allow income earned in the UK to be ignored, but this would be likely only if your overseas employer is sponsoring you and expects you to do some work in the UK when you are not studying.
Students who come directly from a country that has a double taxation agreement with the UK may not need to pay tax on any foreign income and gains which they bring to the UK and use for their maintenance or for their education or training. The amount a student could bring in for their maintenance, education or training will depend on their country’s double taxation agreement with the UK.
Maintenance is money used to fund normal living expenses, for example, money brought to the UK to pay for food and accommodation. Money needed to buy materials for studies, such as books, would be for education.
Bringing money to the UK to invest would not be either for maintenance or for education.
In practice, if a student brings £15,000 or less to the UK in a tax year, HMRC would expect that money to be for maintenance. Money that is used to pay for course fees does not count towards this £15,000 limit, so can be brought to the UK in addition to it. HMRC may ask you to account for your living costs if they are more than £15,000 in the tax year.
International students in the UK may have foreign income or gains (that is, income or gains arising from sources outside the UK), for example, from working back home in the vacations, letting out a foreign property, or from interest on a foreign bank account. For most international students this is not a problem because of double taxation agreements entered into by the UK with various countries.
The current double taxation agreements are listed on GOV.UK.
Students in any of the following situations may need to seek professional advice. This might be the case even if a student is only intending to stay in the UK for a short period of time while they study:
- a student has foreign income or gains which they bring to the UK, but the student comes from a country that has no double taxation agreement with the UK;
- a student has foreign income and gains and they bring some of them to the UK, but leave the balance of the income or gains overseas;
- a student has foreign income or gains that they bring to the UK for reasons other than their maintenance, education or course fees.
Depending on the residence and domicile of the student, there may be UK tax to pay on the foreign income and gains.
The residence position of students who come to the UK is determined under the Statutory Residence Test just as for any other individual. For example, students who spend 183 days or more in a tax year in the UK are resident for that year, but the double taxation agreement may treat the student for some purposes as if they are not resident in the UK. Students from countries with no double taxation agreement with the UK will be resident (and treated as such) if they spend 183 days or more in a tax year. Students may also be resident in the UK if they spend fewer than 183 days in the UK, depending on their circumstances.
In the first instance, we suggest consideration of the residence and domicile section of this website. But remember that even if you are resident you will not necessarily pay tax on foreign income used solely for maintenance, education and training.