UK tax for international students in the UK
We explain below some UK tax considerations relevant to international students in the UK with income or gains in the UK or overseas.
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Under UK domestic law, students have no special status in the UK tax system. So, generally, students are liable to UK tax and National Insurance contributions in the same way as other UK taxpayers.
As a starting point, you should work out your tax residence and domicile status and understand how this affects the scope to which you might owe UK tax. See also our page on Studying in the UK for more guidance on how the statutory residence test applies to international students.
In addition, if you are considering working in the UK, you should check whether your immigration status allows it (see the heading Permission to work below).
You should then consider our general guidance to understand what UK tax (and National Insurance contributions) you may owe on your income and gains. For example:
- Income from UK employment or self-employment
- Income from UK savings and investments, or from property.
- Foreign income and gains
- Gains from disposing of assets
Finally, visiting students may qualify for limited exemptions under certain double taxation agreements (see the relevant heading below) in respect of money for maintenance and education or research grants.
Permission to work
Whether you can work in the UK whilst you are studying depends on what country you are from and your immigration status.
- if you are from an EEA country, or Switzerland, prior to 31 December 2020 you were able to work in the UK while studying and you did not normally need permission to work in the UK.
- if you are an EU, EEA or Swiss citizen and you were resident in the UK before 31 December 2020, we understand that you do not require a visa in order to work in the UK provided you registered under the EU Settlement Scheme by 30 June 2021.
- if you arrive in the UK on or after 1 January 2021, then you may require a visa to study and/or to work in the UK.
- if you are from outside of the EEA and Switzerland, the position varies from country to country. We recommend consulting the UK Council for International Student Affairs to check the position for the country you have come to the UK from.
Further guidance on the rules for EU students studying in the UK from 1 January 2021 can be found on GOV.UK.
Tax on financial support
There are a number of ways that international students may get financial support whilst studying in the UK, such as
- scholarships or bursaries;
- employer-sponsored payments;
- family gifts; and
- personal savings accumulated before arrival in the UK.
In most circumstances such support will not be taxable in the UK and can be ignored for tax purposes.
Limited categories of student are eligible for UK student loans, which are also not taxable. See GOV.UK for information about eligibility for student funding from the 2021/22 academic year onwards in light of the UK’s departure from the European Union.
Most international students from outside the EEA cannot get a UK student loan. There is more information about course fees and sources of funding from the British Council for international students who wish to study in the UK.
Students who are eligible to take out a UK student loan have to make repayments through the UK tax system, in the same way as any other UK student borrower, if they come within the UK tax system after they finish their course (for example, if they find a job in the UK after completing their studies). Special rules apply if you are resident overseas (and thereby not liable to UK tax) after completing your studies.
Double taxation agreements
If you come from a country that has a double taxation agreement with the UK, you may not need to pay UK tax on payments you receive from sources outside the UK if they are made for the purposes of your maintenance, education and training. In some cases, agreements may also provide for an exemption on research grants.
This might be relevant if you are not eligible for an exemption on those payments anyway under UK domestic law (such as scholarships or bursaries), or under HMRC Statement of Practice 4/86, which applies to payments made by an employer to their employee for attendance on a full-time course and where certain conditions are met (for more information, see our Training page under the heading Employer-sponsored courses).
Maintenance refers to normal living expenses, such as food and accommodation. Education refers to things like study materials.
The wording of double taxation agreements can vary. You should therefore check the wording of the relevant agreement. These are listed on GOV.UK. The relevant article for students is usually around Article 20. Note that the exemption may also be limited in monetary terms or there may be a limit on the number of years the exemption can be claimed.
The exemption may refer to the purpose of why the money was brought to the UK (the UK-Finland agreement is one example) – in these instances the nature of the underlying income or gain is irrelevant.
There are also rare occasions where double taxation agreements (such as the UK-Philippines agreement) allow income earned in the UK to be ignored for UK tax purposes – for example, where it does not exceed a certain amount each year and is earned with a view to supplementing the resources available for maintenance or education. For more information on HMRC’s approach to this type of exemption, see HMRC’s Double Taxation Relief Manual.
Like any other exemption under a double tax agreement, it must be claimed (usually on a self assessment tax return).
You should keep records which demonstrate that the exemption is justified based on the specific wording of the double tax agreement. For example, these records may demonstrate why the payment was made, why it was remitted to the UK, or why the income was earned.
Note that HMRC may ask for more information if the relevant amounts exceed £15,000 a year (excluding course fees).