Will I need to pay tax?

Working in Europe | Taxation/salaries | United Kingdom

If you are living and working in the UK you will most likely have to pay tax in some form. There are different types of taxes related to earnings. Your tax liability depends on many factors, most notably your legal immigration status and the right to work in the UK, or on the basis of the visa you obtained 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 the rent income 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.

Find more information on the GOV.UK website.

This is a tax on any profit made from an asset you have sold or given away. For example, if you sell a house you would have to pay Capital Gains Tax on the profit you make. Only the amount made in profit is taxed not the full sum received.

Find more information on GOV.UK website. 

If you buy property for ₤125,000 or more, you have to pay Stamp Duty Land Tax (SDLT), 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 tax.

Find more information about Stamp Duty Land Tax on GOV.UK website.

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 receive income from a foreign country other than the UK and pay income taxes 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 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 their research institution or are self-employed, meaning that they would 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.

External links

Learn more about taxation in the UK

Find out if you are exempt from double taxation