Will I need to pay tax?
If you are going to be living and working in the UK you will usually have to pay tax in some form. There are different types of tax related to earnings. Your tax liability depends on many factors, most notably your legal status as a UK citizen or the visa used to enter the UK.
Types of payable tax in the UK:
Income Tax will be applied to your earnings, including wages, interest from savings and investments, and rent from any property you own. You will also have to pay income tax on pensions and on certain benefits in kind such as corporate motor vehicles or company paid accommodation.
This is a tax on any profit from an asset which you have sold or given away. For example, if you sell a house which was not your main home, you would have to pay Capital Gains Tax on the profit that you make.
If you buy property for ₤125,000 or more, you have to pay Stamp Duty Land Tax, which can range from one to seven percent of the value of your property. If you buy shares, you may also have to pay a type of Stamp Duty.
There are other types of taxes payable in the UK which are not related to earnings, such as inheritance tax and taxes on goods and services.
What if I am paid from my home country?
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. Certain countries have a double taxation agreement to avoid being taxed twice.
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.
Do I pay tax on a grant or fellowship?
Paying tax on grants or fellowships is dependent upon two main factors:
- The double taxation agreement between the country of payment and the UK.
- Your status as a student or a post-doctoral researcher.
Post-doctoral researchers are usually employed by the research institution or self-employed, meaning that you will be subject to income tax.
However, double taxation agreements could exempt both post-doctoral and student researchers. You are advised to refer to this HMRC’s Double Taxation Relief Manual for further information.