If you're going to the UK to work it's important to know a few UK tax facts to make sure you don't end up losing your money.
When you start work in the UK you need to make sure you give your employer your National Insurance Number so you avoid paying emergency tax – which is much higher than the normal UK tax rates. Your National Insurance Number (NIN) is the unique number allocated to you by the Department for Work and Pension in the UK. It allows you to work, pay taxes and access public services in the UK.
PAYE and Self-employed tax
Once you start working you will need to pay UK tax either as a PAYE employee (if you're a receptionist, nurse or a teacher for example) or as self-employed person, such as a construction subcontractor.
If you are PAYE your employer should deduct tax from your earnings each time you get paid. If you are self-employed you are responsible for your own UK tax return called a self-assessment tax return. As a self-employed in the UK you can claim back work-related expenses such as work tools, transport and dry cleaning your work uniform.
If you've started work already in the UK you will be paying 20% income tax on earnings above £1830 and 40% on any earnings over £36,401.
Claim your UK taxes back
If you do end up on the wrong tax code and overpay tax in the UK, you can claim this money back once you leave the UK or when the tax year ends on April 5th. You have up to six years to claim any overpaid UK tax.
If you want to find out how much you could be owed, you can use a free online tax refund calculator. To claim your UK tax refund, you need to file a tax return. A tax return is the annual submission of tax forms documenting your earnings, taxes paid, deductable expenses and benefits that you send to the HM Revenue & Customs for review. From this information it is determined whether you have overpaid tax and are owed a tax refund.
The amount of your UK tax refund depends on factors like:
- Your earnings
- Your expenses
- Whether you worked the whole tax year
- If you had more than one job at a time or changed jobs
- Whether you have children
- If your circumstances changed, eg: you became self-employed
- If you took a break during or between employments
When choosing a tax return company, we recommend that you select companies which:
- Are HM Revenue & Customs registered agents
- Have an office in the UK
- Can guarantee that your tax refund will be 100% legal and safe
If you haven't set up your National Insurance Number yet, taxback.com can also help you with this.
Taxback.com customers get average UK tax refunds of £963 for PAYE and £1453 for construction workers' tax refunds.