Living & Working in the UK

Travelling from abroad to work in the UK can be an exciting experience, however, like any country, there are certain tax obligations that you, and your employer, must adhere to. Provided you do so, you can get on with enjoying your UK experience in full.

Tax in the UK

The tax system in the UK operates on a Pay As You Earn (PAYE) model, with income tax and National Insurance contributions witheld monthly by your employer and paid to the government on your behalf. The only time you have to fill in an end-of-year self-assessment tax return is if you are self-employed. If you are self-employed, you must complete a tax return by the end of the tax year (April 5) and submit it to Her Majaesty’s Revenue and Customs (HMRC), who then issue you a tax bill, which must be settled by you.

Important tax documents.

To begin paying taxes in the UK as well as National Insurance contributions, you require a National Insurance (NI) Number. This is like a unique personal account you hold with HM Revenue and Customs and enables them to issue you with the correct tax code. You can apply for an NI Number through your local Job Centre Plus, which you can find at www.jobcentreplus.gov.uk. You must be able to provide evidence that you’re actively seeking employment, as well as proof of a UK address. Until you receive your NI Number, you will be taxed on a higher, emergency tax code but any overpayment can be reclaimed through PAYE.

• P45- When you leave a job your employer will issue you with one of these forms and it tells your new employer what tax code you should be on.
•  P46 - You are issued with one of these forms in lieu of a P45. If you’ve lost your P45, you won’t be able to get another so the P46 allows HMRC to issue you with a tax code for your new employer.
• P60 - This form provides a summary of your gross earnings and taxes that have been deducted for the financial year. Keep this form for your records as you’ll need it should you wish to make a claim for a tax refund.

Claiming a tax refund

The times at which you can claim a tax rebate throughout the tax year depends on your employment circumstance. If you are still employed in the UK, you must wait until the end of the tax year (April 5) to make your claim for repayment. If, however, you have departed the UK, you can make a claim for a tax rebate at any point in the tax year. To find out more about tax rebates, contact HM Revenue and Customs, www.hmrc.gov.uk.

Banking in the UK

Opening a bank account in the UK can be tricky if you’re travelling from abroad and not a UK national. Banks often require proof of a UK residence to which you’re registered, and utility bills in your name, both of which can be hard to come by if you’ve just moved to the UK. However, there are a couple of solutions to the trouble of banking in the UK and, provided you possess the right documentation, you shouldn’t find it too much of a chore.