The UK tax system has a reputation for being simple for employees and cruel for everyone else. Both halves are true. If you earn a salary, tax and National Insurance disappear from your payslip and you may never fill in a form. If you have foreign income, a side business or a home abroad, you need to understand the system early.
Here is how income tax in the UK works for someone who has just arrived, using the 2026 to 2027 numbers published by GOV.UK.
How do you become a tax resident for income tax in the UK?
Your residence is decided year by year by the Statutory Residence Test, and nationality does not matter. The tax year runs from 6 April to 5 April.
You are automatically UK-resident if you spend 183 days or more in the UK in the year; or your only home is in the UK for at least 91 days in a row, with at least 30 days of the tax year spent in it; or you work full-time in the UK over a 365-day period. You are usually non-resident if you spend fewer than 16 days in the UK, or fewer than 46 days if you were not resident in the three previous tax years, or work full-time abroad with fewer than 91 days in the UK, of which no more than 30 working.
In between, the sufficient ties test applies. For someone arriving after three years of non-residence, HMRC counts four ties: family, accommodation, work and the 90-day tie. With 46 to 90 days you need all four to be resident; with 91 to 120 days, at least three; above 120 days, at least two. The exact meaning of each tie is in HMRC's RDR3 guidance, so read it if you are near the edge.
How much income tax in the UK will you pay in 2026 to 2027?
In England, Wales and Northern Ireland: 0% on the first £12,570 (the Personal Allowance), 20% from £12,571 to £50,270, 40% from £50,271 to £125,140 and 45% above. The allowance falls by £1 for every £2 of income above £100,000 and disappears at £125,140. Wales set the same rates for 2026 to 2027.
In Scotland, most earned income and pensions follow the Scottish bands: 0% to £12,570, 19% to £16,537, 20% to £29,526, 21% to £43,662, 42% to £75,000, 45% to £125,140 and 48% above. Where you live decides which bands apply, not where your employer is. Savings and dividends use UK-wide rates.
Employees also pay National Insurance: in 2026 to 2027, 8% on earnings between £1,048 and £4,189 a month, and 2% above; see National Insurance number: how to apply. To see the effect on your budget, read cost of living in the UK.
What happens in the year you arrive?
Your first tax year may be split. Under split-year treatment, the year is divided into a non-resident part and a resident part, so foreign income before your arrival is outside UK tax. You must be resident for the year and meet the conditions of one of the cases HMRC sets for arrivals: starting to have your only home in the UK, starting full-time work in the UK, ceasing full-time work abroad, joining a partner who has done so, or starting to have a home here. You do not get it if you lived abroad for less than a full tax year before coming back.
The conditions are detailed and mistakes are costly, so keep a diary of dates: arrival, first day of work, the day you took the lease.
Not sure how many days you can spend before you become resident, or whether your arrival year qualifies for a split? Moovy can organise your dates, list the HMRC pages that apply and prepare questions for an accountant. Moovy does not file your return for you and is not a tax adviser, so for a decision involving foreign income, ask a qualified one.
Do you need to file a tax return?
Employees on PAYE usually do not. You must send a Self Assessment return in some cases: self-employment income over £1,000 before expenses, being a partner in a partnership, capital gains tax due, or untaxed income such as rent, interest, dividends or foreign income. Tell HMRC by 5 October after the end of the tax year concerned if you have never sent a return (for example by 5 October 2027 for 2026 to 2027), and you receive a Unique Taxpayer Reference.
The Self Assessment deadline for online filing and payment is 31 January after the tax year (31 January 2027 for 2025 to 2026). Paper returns are due 31 October. If you make payments on account, the second falls on 31 July. Penalties start at £100 for a late return, then £10 a day after three months, and late payment adds 5% of the unpaid tax at 30 days, 6 months and 12 months, plus interest.
What can the 4-year foreign income and gains regime do for you?
On 6 April 2025, the 4-year foreign income and gains regime replaced the remittance basis used by "non-doms". If you were not UK-resident for at least ten consecutive tax years before you arrive, you may claim the FIG regime for your first four years of residence. It relieves eligible foreign income and gains, such as profits of an overseas property business, interest on a foreign bank account and dividends from non-UK companies, but not foreign employment income.
The catch is the price. Claiming costs you the tax-free allowances for Income Tax and Capital Gains Tax for the year, even if you only claim relief on part of your foreign income. So weigh the relief against the £12,570 Personal Allowance before you claim. You choose which sources to claim relief on, and you make the claim in your Self Assessment return, year by year.
If you work partly abroad, Overseas Workday Relief may cover part of your pay for work done outside the UK, up to the lower of £300,000 or 30% of qualifying employment income, for up to four years. It requires an election in your return, and the election also costs you the allowances for that year.
What if your employer or your home country also asks for tax?
Some newcomers keep a bank account, a rented-out flat or a small business in their country of origin. All of it can matter in the UK once you are resident. Make a list in your first month: account balances, interest earned, rent received, dividends, and any pension you already draw. Gather the foreign tax statements too, since they are the evidence for any credit.
Your employer will deduct tax on your UK pay through PAYE. If the code looks wrong, check it in your HMRC personal tax account and tell the payroll team, because an emergency code at the start of a job is common and fixable. For self-employed income, remember that a payment on account in your first year can surprise you, so set money aside each month; the guide to self-employed in the UK shows how.
Most important, do not sit on a question. HMRC penalties are mechanical. The same goes for the tax authority of your home country: tell them you have moved, ask how they treat your case and keep written replies.
How do you avoid double taxation?
The UK has a tax treaty with each EU country and with Switzerland. The treaty decides who may tax which income, such as pensions, rent or public-sector pay. If you have paid tax abroad on income that the UK taxes, claim Foreign Tax Credit Relief in your return. If an income should be exempt in the other country, ask HMRC for a certificate of residence, which you can apply for online, and give it to the foreign tax office.
Before you decide on a split year, a FIG claim or Overseas Workday Relief, have a UK tax adviser or accountant confirm your situation.
For retirees, the pension article is the better guide: see retiring in the UK. For freelancers, see self-employed in the UK.
Which tax mistakes should you avoid?
- Believing that 183 days is the only test. Other tests can make you resident sooner.
- Forgetting foreign bank interest and rent. UK residents generally declare them.
- Using the wrong tax year. It begins on 6 April, not 1 January.
- Reading old non-dom advice. It describes the system before April 2025.
- Ignoring council tax. Register with your council; if you live alone as an adult, you get 25% off your bill.