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 section aims to ensure that international students in the UK can understand the UK tax system.
This section of the website 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.
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
- 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 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 do not need to pay tax on any foreign income and gains, which they bring to the UK 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.
International students in the UK may have foreign income or gains (such as income or gains arising from sources outside the UK), for example, from working back home in the vacations, letting out a property, or from interest on a 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 they come 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.
Students who come to the UK to study for a period of less than two years may not become UK resident for tax purposes. Strictly, students present in the UK for 183 days or more in a tax year are resident, but the double taxation agreement may treat the student as 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 are present for 183 days or more in a tax year.
Students who are in the UK for more than two years, but less than four years, will probably be UK resident for tax purposes.
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.