Do international students pay UK tax?

Updated on 23 May 2017

There are some special rules that affect international students who come to the UK to study. In this section we look at them.

Can I come to the UK to study?

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.

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Can I work in the UK while studying?

Whether you can work in the UK whilst you are studying depends on what country you are from and your immigration status. As a general rule:

  • If you are from an EEA country or Switzerland – you can work in the UK while studying and do not normally need permission to work in the UK. You need your passport or identity card, and may need to show this to your employer as proof of identity.
  • If you are from outside of the EEA – the position varies from country to country. We recommend consulting the website of the UK Council for International Student Affairs to check the position for the country you have come to the UK from.

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Is financial support for international students taxable in the UK?

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 for tax purposes.

Limited categories of student are eligible for UK student loans, which are also not taxable, for example:

  • British citizens and people with settled status,
  • EEA migrant workers,
  • and refugees etc, who may also have to meet additional requirements. These further conditions may involve being resident in the UK or EEA for three years.

Most international students cannot get a UK student loan. There is more information about course fees and sources of funding on the British Council’s website 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. There is information on repaying student loans on GOV.UK. There is information on repaying student loans if you are outside the UK below.

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What is the tax residence position of international students

Generally, you are treated in the same way as other migrants who come to live in the UK. In the first instance therefore we suggest you consider the 'residence and domicile section' of this website.

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Are UK earnings of international students taxable in the UK?

Many international students find work in the UK with a UK employer – this may be a part-time job in the UK during term time or a full-time job during the vacation, for example.

Whether or not you actually pay tax, and at what rate, will depend on how much income you have and whether or not you are eligible for the personal allowanceYou may also have to pay National Insurance contributions.

There is more information in the ‘employed section’ of this website

There are rare occasions where double taxation agreements allow income earned in the UK to be ignored for 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. Whether such money is for a student's maintenance or education is a question of fact and the onus is on the student to provide the evidence. If money exceeds the amount needed for maintenance, or education, the whole amount is taxable and not merely the excess.

You can find some detailed information on the position of students under double taxation agreements in HMRC’s guidance on GOV.UK.

The only way to check is to examine the particular agreement for the country concerned. The current double taxation agreements are listed on the GOV.UK website .

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Are foreign income and gains of international students taxable in the UK?

International students in the UK may have foreign income or gains (that is 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.

Depending on your residence (and domicile) position, there may be UK tax to pay on the foreign income and gains. However, you will not necessarily pay tax on foreign income and gains used solely for maintenance and education – more on this below. Unless this exemption applies to you, you will probably have to pay tax on your foreign income and gains in the same way as others.

Therefore, students in any of the following situations may need to seek professional advice:

  • a student has foreign income or gains which they bring to the UK, but they come from a country which 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 which they bring to the UK for reasons other than their maintenance, education or course fees.

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Are maintenance and education payments for international students taxable in the UK?

Students, who come 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.

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, HM Revenue & Customs (HMRC) would expect that money to be for maintenance. Money, which 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.

You can find some detailed information on the position of students under double taxation agreements in HMRC’s guidance on GOV.UK.

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What happens when I leave the UK?

When you leave the UK you may be entitled to a tax refund, as many students who work in the UK do so for only part of the year or they work part-time in several jobs. When this happens the UK Pay as You Earn (PAYE) system may not deduct the right amount of tax and often deducts too much. Visit the ‘employed section’ of this website for more information.

It is not usually possible to get a refund of UK NIC. Visit the page ‘do international students pay National Insurance contributions?’ for more information.

Visit the section ‘can I claim a VAT refund if I leave the UK?’ for more details about VAT refunds when leaving the UK for a non-European Union (EU) country.

If you received a UK student loan and you leave the UK for more than three months after finishing your course you must inform the Student Loans Company (SLC). If you have secured employment abroad, SLC will ask for the name of the employer and evidence of the salary. They will probably ask you to set up a direct debit repayment arrangement. The level of your repayment will depend on your overseas earnings.

It is important for students to take note of the repayment threshold relevant to the country to which they are going, as it is not necessarily the same as the UK threshold (2017/18 £17,775 per annum for Plan 1 loans and £21,000 for Plan 2 loans). Thresholds vary according to comparison calculations between the cost of living in the UK and the other country. The SLC repayment website gives the thresholds.

Similarly, if you have been living abroad and return to the UK for three months or more, you should let the SLC know. This is important because if you find employment in the UK, you might need to start making repayments via the UK tax system again and you will need to cancel any separate arrangements that you have made with the SLC.

There is more information on the website Tax Guide for Students.

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