Do international students pay UK tax?

Updated on 9 September 2020

Migrants

On this page we look at some special rules that affect international students who come to the UK to study.

Image of international students with a map of the world in front
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⚠️ The UK left the European Union (EU) on 31 January 2020 and entered a transition period, currently due to end on 31 December 2020, during which EU law continues to apply in the UK. The UK’s relationship with the EU beyond the end of the transition period has not yet been finalised. Please note that the guidance below reflects the law as it applied before the UK’s departure from the EU, and as it will continue to apply throughout the transition period.

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, during the Brexit transition period (which is scheduled to end on 31 December 2020) you can work in the UK while studying and you do not normally need permission to work in the UK. You need your passport or identity card. You may need to show this to your employer as proof of identity. The position from 1 January 2021 has not yet been finalised.
  • 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.

Is financial support for international students taxable in the UK?

There are a number of ways that international students may get financial support whilst studying in the UK, such as

  • 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(note that this may be subject to change as a result of the UK’s departure from the European Union),
  • Refugees, who may also have to meet additional requirements. These further conditions may involve being resident in the UK (or EEA, subject to change as a result of the UK’s departure from the European Union) for three years. 

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. There is information on repaying student loans on GOV.UK. There is information on repaying student loans if you are outside the UK below.

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.

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 allowance. You may also have to pay National Insurance contributions.

There is more information in the employment section.

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 GOV.UK.

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 in their home country in the vacations, letting out a property, or from interest on a non-UK 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. There is more on this below. Unless this exemption applies to you, you will normally 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 leaves 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.

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 may not need to pay tax on 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.

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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