Understanding UK tax when you first move here can feel overwhelming — especially as the UK tax system has its own rules on residency, domicile, and foreign income that are unlike most other countries.
This guide explains your UK tax obligations as a new arrival in a step-by-step structure.
Step 1 — Establishing Your UK Tax Residency
The Statutory Residence Test (SRT)
UK tax residency is not just about where you pay — it’s a legal test with specific rules. The SRT has three components:
Automatic Overseas Tests (AO tests) — If any of these apply, you are NOT UK tax resident:
- You were UK resident in 1 or more of the previous 3 tax years and spend fewer than 16 days in the UK
- You were NOT UK resident in any of the previous 3 years and spend fewer than 46 days in the UK
- You work full-time overseas (at least 35 hours/week on average) and spend fewer than 91 days in the UK
Automatic UK Tests — If any of these apply, you ARE UK tax resident:
- You spend 183 or more days in the UK in the tax year
- Your only home is in the UK
- You work full-time in the UK (at least 365 days counting, at least 274 days of actual work)
Sufficient Ties Test — If neither of the above tests conclusively determines your residency, the number of “ties” you have to the UK (family, accommodation, work, 90-day tie, country tie) is combined with days spent in the UK to determine residence.
For most people moving to the UK to work full-time, the automatic UK test is met quickly.
Step 2 — Split-Year Treatment in Your First UK Tax Year
If you move to the UK partway through a tax year (6 April to 5 April), split-year treatment might apply.
What Split-Year Treatment Does
Split-year treatment divides your tax year:
- Overseas part — before you moved to the UK; you’re treated as non-UK resident
- UK part — from your arrival date; you’re treated as UK resident
This means you should not pay UK tax on income received before you moved — such as earnings in your home country from January to March if you moved in March.
Cases That Qualify for Split-Year Treatment
There are 8 cases in the SRT. New arrivals commonly fall under:
- Case 4: You start UK full-time work during the year
- Case 8: You come to the UK to live permanently (non-resident in previous 3 years)
Claiming Split-Year Treatment
Do this on a Self Assessment tax return. You must actively claim it — it is not automatic. File using SA109 (Residence, remittance basis etc.) supplementary pages.
Step 3 — PAYE: Tax on Employment Income
If you’re employed in the UK, income tax and National Insurance are deducted from your salary before you receive it — this is Pay As You Earn (PAYE).
Starting PAYE as a New Arrival
You’ll complete a Starter Checklist for your employer (there’s no P45 from a UK employer when you first arrive):
| Statement | Choose when… |
|---|---|
| A | First job in the UK since last 6 April |
| B | Only job but you had another since 6 April |
| C | You have another UK job or receive a pension |
For most new arrivals: Statement A is correct.
Your Tax Code
Your employer assigns a tax code, which determines how much tax is deducted:
- 1257L — the standard code for 2026/27, giving you the £12,570 Personal Allowance
- 1257L W1/M1 — emergency code; tax calculated on a non-cumulative basis (may mean over-paying initially)
- BR — Basic Rate only; used if HMRC hasn’t confirmed your personal allowance
Emergency codes self-correct during the year once HMRC processes your record.
National Insurance on Earnings
NI is also deducted via PAYE from employed earnings:
- Class 1 NI: 8% on earnings between £12,570 and £50,270 per year
- Above £50,270: 2%
Each year of NI contributions counts towards your State Pension entitlement. You need 35 qualifying years for the full new State Pension (£221.20/week in 2026/27).
Step 4 — National Insurance Number
Your NI number is your personal reference for the UK tax and benefits system — equivalent to a Social Security Number or Tax File Number.
Apply as soon as possible: gov.uk/apply-national-insurance-number
You can start work without one, but inform your employer you’ve applied. Without an NI number, you may be placed on a Week 1/Month 1 emergency code or have NI contributions applied incorrectly.
Step 5 — Overseas Income and Foreign Tax
Do I Pay UK Tax on My Foreign Income?
This depends on two factors:
- UK tax residency — only UK tax residents are normally taxed on overseas income
- Domicile status — historically, non-domicile status allowed the remittance basis; this changed significantly in April 2025
The New FIG Regime (from April 2025)
The old remittance basis for non-domiciled residents was abolished. A new system — Foreign Income and Gains (FIG) — replaced it:
| Pre-April 2025 | From April 2025 (FIG regime) | |
|---|---|---|
| When available | If non-UK domicile | First 4 years of UK tax residence, if non-resident for prior 10 years |
| What it covers | Foreign income/gains not remitted to UK | All foreign income and gains (regardless of remittance) |
| Duration | Indefinite (with annual charge after Year 7) | 4 tax years only |
| After 4 years | Remittance basis charges increased | Worldwide income taxable in full |
Who benefits: New arrivals who have not been UK tax resident in the previous 10 years can elect for the FIG regime and pay no UK tax on foreign income and gains for up to 4 tax years.
After 4 years: Your worldwide income (wherever earned) is taxed in the UK, subject to double taxation relief.
Overseas Pension Income
UK treatment of foreign pension income depends on the country. Many double taxation agreements give the country of residence the right to tax pension income. The UK/France DTA, UK/Australia DTA, and UK/US DTA all have different rules. See our Double Taxation Treaties Guide.
Step 6 — Self Assessment: Do You Need to File?
Many new UK arrivals with simple PAYE employment only do NOT need to file a Self Assessment return. HMRC will collect the right tax through PAYE.
You WILL need to file Self Assessment if you:
- Have foreign income (and the FIG regime applies, or foreign income exceeds £2,000)
- Are self-employed or a partner in a business
- Have rental income
- Earn over £100,000
- Are claiming the FIG regime election
- Received overseas income or gains in the tax year
- Have complex affairs in your first split year
Register for Self Assessment: gov.uk/register-for-self-assessment
Register by 5 October after the end of the relevant tax year. File online by 31 January.
Step 7 — Common Tax Traps for New Arrivals
| Trap | What happens | How to avoid |
|---|---|---|
| Wrong starter declaration | Employer uses emergency code, deducts too much or too little tax | Complete the Starter Checklist accurately; reclaim overpaid tax via Self Assessment |
| Forgetting foreign income | Foreign income overlooked, leading to underpayment notice | Declare all non-UK income on SA return; use FIG election if eligible |
| NI gaps in first months | Earnings below threshold or wrong NI not applied | Chase NI number application; review payslips each month |
| Missing split-year claim | Whole year taxed as UK resident; overseas income over-taxed | File SA109 and claim appropriate split-year case |
| Personal Allowance removed | Earning over £100,000 removes allowance via salary | Plan pension contributions to bring income below £100,000 if you’re near the threshold |
UK Tax Year Dates to Know
| Date | What happens |
|---|---|
| 6 April | New tax year begins |
| 31 July | Second Self Assessment payment on account |
| 5 October | Deadline to register for Self Assessment |
| 5 April | Tax year ends |
| 31 January | SA return filing deadline; first payment on account |
Tax Checklist for New UK Arrivals
| Task | Done? |
|---|---|
| Apply for NI number | ☐ |
| Complete Starter Checklist for employer | ☐ |
| Check first payslip tax code is correct | ☐ |
| Identify all sources of foreign income | ☐ |
| Assess whether FIG regime election applies (10-year non-residence) | ☐ |
| Register for Self Assessment if required | ☐ |
| Claim split-year treatment on SA return if applicable | ☐ |
| Check any DTA applies to home country income | ☐ |