Douglas Olsen
International students in the UK may have to pay taxes depending on their residence status. Generally, students are liable to pay UK tax and National Insurance contributions in the same way as other UK taxpayers. However, residence status can be difficult to determine for international students, as the academic year does not align with the tax year, and the definition of 'home' can be unclear. Students on a Tier 4 visa are not considered UK residents, but those living in the UK for longer than 6 months are likely to be considered tax residents. International students from outside the EEA may not be eligible for a UK student loan and will need to consult the UK Council for International Student Affairs for funding options. Additionally, students with income from sources other than employment or investments, such as scholarships or grants, may be exempt from UK tax.
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What You'll Learn
International students and council tax
International students in the UK are generally liable for UK tax and National Insurance contributions in the same way as other UK taxpayers. However, there are certain exemptions and considerations that apply specifically to international students.
Council Tax
Council Tax is a fee set by local authorities in England, Scotland, and Wales to fund local services such as rubbish collection, the police, and the fire brigade. The fee is calculated per household and is based on the value of the dwelling. People living in privately rented accommodations or who own their homes are typically responsible for paying Council Tax. However, full-time students are usually exempt from paying Council Tax. To be considered a full-time student for Council Tax purposes, an international student must meet specific criteria, including being enrolled at an educational institution in the UK or the European Union and studying for a minimum number of hours per week.
It is important to note that local authorities determine sole or main residence on a case-by-case basis. If an international student is deemed to be 'solely or mainly' resident in the UK and their course duration does not meet the academic year requirement, they may not qualify for the student exemption and may be counted as a resident adult for the Council Tax bill.
Other Tax Considerations
International students with income or gains in the UK or overseas must consider their tax residence status and how it impacts their tax obligations. They may need to pay tax on their foreign income, depending on their country's double-taxation agreement with the UK. Additionally, scholarship or grant income may be exempt from UK tax, and special international rules may apply if sponsored by an overseas employer.
For tax years up to and including 2024/25, students who are tax residents in the UK may avoid paying tax on foreign income due to their non-domicile status. From 2025/26 onwards, the remittance basis will no longer apply, and international students may be eligible for relief under the new regime for foreign income.
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International students and UK student loans
The UK is one of the most popular study destinations for international students, hosting hundreds of thousands of international students annually. However, international students from outside the EEA are generally unable to obtain a UK student loan. The average cost for an international student studying at the undergraduate level in the UK is about £22,000 per year, but this can vary from £11,400 to £38,000. At the postgraduate level, the average cost is about £17,109 per year, but this can range from £11,400 to £38,000.
Some countries have student loan programs available to their citizens studying abroad, such as the Study Abroad Loan and Foreign Enrolled Loan for US students. Additionally, some universities in the UK may offer their own student loan schemes for talented students from low-income backgrounds, including non-EU students. It is recommended to contact the university directly to inquire about such opportunities.
International students can also explore other financial options, such as scholarships, grants, and bursaries. Scholarships are the most common form of funding for international students and are usually awarded based on academic merit or talent in areas like sports or music. Private grants and loans are also available from companies and non-governmental organisations, although these often come with conditions or requirements, such as working for the company after graduation.
It is important to note that international students in the UK may have tax obligations, and they should determine their tax residence status. Students generally do not have a special status in the UK tax system and are liable for tax and National Insurance contributions like other taxpayers. International students with income from overseas may need to work out their residence position under the statutory residence test (SRT) to understand their tax liability. Additionally, students should check if their country has a double-taxation agreement with the UK to avoid paying taxes on the same income in both countries.
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International students and income tax
International students in the UK may have to pay income tax and National Insurance contributions, just like any other UK taxpayer. However, the rules vary depending on the student's country of origin and residence status in the UK.
Residence Status
A person's UK residence status determines whether they need to pay tax in the UK on their foreign income. Non-residents only pay tax on their UK income, while residents pay UK tax on all their income, whether from the UK or abroad.
To be considered a UK resident for tax purposes, an individual must meet one or more of the automatic UK tests or the sufficient ties test and not meet any of the automatic overseas tests. One of the automatic UK tests is spending at least 183 days in the UK during the tax year (6 April to 5 April). Another is having only one home, which was in the UK for 91 days or more in a row, and visiting or staying in it for at least 30 days of the tax year.
International students may find it challenging to determine their residence status due to their likely patterns of presence. For example, students typically have a 'home' in their home country and a term-time residence in the UK, making it unclear where their 'home' is for tax purposes. Additionally, the academic year (usually September to July) does not align with the tax year, further complicating the residence determination.
Income Tax for International Students
International students from outside the EEA (European Economic Area) generally cannot get a UK student loan and, therefore, do not have to worry about repaying student loans through the UK tax system. However, those who are eligible for UK student loans, including some EEA citizens, will have to make repayments if they come within the UK tax system after finishing their studies.
International students with income from employment or investments may have to pay UK income tax, depending on their residence status and any applicable double taxation agreements. Some countries have double taxation agreements with the UK, which may exempt students from paying UK tax on their income if they work while studying. It is important to review the specific agreement between the UK and the student's home country.
Students may also have income from scholarships or grants, which may be exempt from UK tax. Additionally, special international rules may apply if the student's overseas employer is sponsoring them during their training or if they receive certain payments from sources outside the UK for maintenance, education, and training.
If an international student has a UK personal allowance (for example, if they are an EEA citizen) and their worldwide income in a particular UK tax year is below the personal allowance threshold (£12,570 for 2025/26), they will not have to pay UK tax for that year, regardless of their residence status.
Council Tax Exemption
It is important to note that while international students may have to pay income tax, they are generally exempt from paying council tax. This exemption applies to all students, regardless of their nationality.
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International students and work visas
International students who want to study in the UK need to apply for a Student visa. This applies to students who are 16 or older and want to study in further or higher education. The visa costs £524 and you may also have to pay the healthcare surcharge as part of your application. The amount you pay depends on how long your visa lasts. If you are under 18 and want to study at an independent school in the UK, you may be eligible for a Child Student visa.
If you are an EU, EEA or Swiss citizen and you were a UK resident before 31 December 2020, you do not need a visa to work in the UK, provided you registered under the EU Settlement Scheme by 30 June 2021. If you are from outside the EEA and Switzerland, you may need a visa to work in the UK, depending on the country.
If you are on a Student visa, you may be able to work, depending on what you are studying and whether you are working in or out of term-time. A Student visa issued for full-time degree-level studies at Cambridge allows you to work for a maximum of 20 hours per week during term-time. This includes paid or unpaid work, and for one or more organizations. During official vacation periods, you can work full-time. This includes full-time internships or placements unless they are part of your course. Undergraduate students can undertake internships during official University vacation periods, but the employer will need evidence of the academic calendar as confirmation. Masters students can also undertake internships during vacation periods, but the dates vary depending on the course, so it is important to check with the faculty or department. A small number of Masters courses include internships as part of the course, in which case the internship details will need to be provided to the Home Office in advance.
Once your course has officially finished, you will be classed as on 'vacation' and can work for up to 4 months or until your Student visa expires, whichever is sooner. If you wish to take a permanent full-time job in the UK after your course ends, you will need to apply to change your visa status. Most students are eligible to apply for a two-year Graduate Route working visa before their Student Visa expires. Successful applicants will be able to work or look for work in any sector and at any level.
In terms of tax, students generally have no special status in the UK tax system and are liable to UK tax and National Insurance contributions in the same way as other taxpayers. However, students may have income from sources such as scholarships or grants, which may be exempt from UK tax. If you are entitled to a UK personal allowance and your worldwide income in a particular UK tax year (6 April to 5 April) does not exceed that allowance, you will have no UK tax to pay for that year, irrespective of your residence status. If your country has a double-taxation agreement with the UK, you may not need to pay UK tax on your income if you work while studying.
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International students and residence status
International students in the UK are generally subject to the same tax rules as other UK taxpayers. However, their residence status, which determines their tax liability, can be complex due to their likely patterns of presence.
The residence position of students in the UK is determined by the statutory residence test (SRT), which focuses on where an individual has a 'home' and whether they carry out full-time work in the UK or overseas. Students are unlikely to meet the tests for full-time work in the UK or overseas while studying, even if they work full-time during the holidays. Additionally, it can be unclear where a student considers their 'home' to be, as they may have a residence in their home country and the UK during term time.
For tax years up to and including 2024/25, students who are tax residents in the UK may avoid paying tax on foreign income and gains due to their non-domicile status and the remittance basis. From 2025/26 onwards, the remittance basis will no longer be applicable, and international students may be eligible for relief under the new regime for foreign income and gains.
International students with income from sources other than employment or investments, such as scholarships or grants, may be exempt from UK tax. Additionally, special international rules may apply if their overseas employer is sponsoring them during their training or if they receive certain payments from sources outside the UK for maintenance, education, and training.
To determine their residence status, international students can refer to the residence status checker provided by HM Revenue and Customs (HMRC). This tool will indicate whether they were a UK resident in any tax year from 6 April 2016.
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Frequently asked questions
It depends on how many days you spend in the UK in the tax year (6 April to 5 April the following year). You will be considered a UK resident for tax purposes if you meet one or more of the automatic UK tests or the sufficient ties test and do not meet any of the automatic overseas tests. You may be resident under the automatic UK tests if:
- You spent 183 or more days in the UK in the tax year.
- Your only home was in the UK for 91 days or more in a row, and you visited or stayed in it for at least 30 days of the tax year.
Non-residents only pay tax on their UK income and do not pay UK tax on their foreign income. Residents normally pay UK tax on all their income, whether it’s from the UK or abroad. If you are an international student with income or gains in the UK or overseas, you may be liable to pay UK taxes and National Insurance contributions in the same way as other UK taxpayers.
No, international students are exempt from paying council tax. However, they still need to pay income tax at their appropriate tax band.
