Savanna Hoffman
International students in the UK are generally liable to pay taxes and National Insurance contributions on their income, just like other UK taxpayers. However, there are certain exemptions and considerations that apply specifically to international students. For example, students from countries with a double taxation agreement with the UK may not need to pay UK tax on their foreign income or on income earned in the UK. Additionally, students may be exempt from taxes on income generated from sources other than employment or investments, such as scholarships or grants. The amount of tax an international student pays depends on their income, and they may be eligible for deductions or credits that reduce their tax liability. It is important for international students to understand their tax obligations and consult with HM Revenue and Customs (HMRC) or a tax advisor to ensure compliance with UK tax laws.
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What You'll Learn
International students working part-time in the UK
International students in the UK are liable to pay tax and National Insurance contributions in the same way as other UK taxpayers. However, if your income is from a country that has a 'double taxation agreement' with the UK, you may not need to pay UK tax on it, as long as it's used for course fees or living costs. Some double-taxation agreements also mean you do not pay UK tax on your income if you work while studying.
If you are an international student in the UK and wish to work part-time, there are a few things you should keep in mind. Firstly, check the rules of your student visa. Usually, students on a Tier 4 (General) student visa are allowed to work up to 20 hours per week during university term time and full-time during vacations. However, some visas may have different restrictions, and you could risk facing deportation if you do not comply. Additionally, you cannot be self-employed, freelance, or on a contract while on a student visa.
Many universities offer on-campus job opportunities, which are often part-time roles in shops, cafes, bars, events, or student support services. Off-campus jobs are also available, often in industries that employ part-time workers, such as hospitality and retail.
It is important to note that working part-time while studying can be demanding, and it is recommended that international students work no more than 15 hours per week to maintain a study-life balance. Additionally, your university course should always be your priority, and taking on too much work could impact your studies.
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Foreign income and tax exemptions
Foreign students in the UK are generally liable to pay UK tax and National Insurance contributions, similar to other taxpayers in the UK. However, they usually do not pay UK tax on foreign income or gains if they are used for course fees or living costs. This is dependent on the country the student is from having a 'double-taxation agreement' that covers students.
If the country of origin does not have such an agreement, the student will have to pay tax like anyone else moving to the UK. Even if there is an agreement, HM Revenue and Customs (HMRC) may ask for an account of living costs if they exceed £15,000 in a tax year, excluding course fees.
Some double-taxation agreements mean students do not pay UK tax on their income if they work while studying. There may be a limit on the monetary amount or the number of years the exemption can be claimed. These agreements vary in their wording and should be checked carefully.
Students who take out a UK student loan must make repayments through the UK tax system, just like any other UK borrower. Special rules apply if the student is a resident overseas and not liable for UK tax after graduation.
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Tax residence status
The tax residence status determines whether an individual is liable to pay taxes in the UK on their income and gains. This applies to international students in the same way as any other individual.
The residence position of students who come to the UK is determined under the statutory residence test (SRT). The number of days spent in the UK in a tax year (6 April to 5 April the following year) is a key factor in determining residence status. If an individual spends 183 or more days in the UK in a tax year, they are considered a resident. If they spend fewer than 16 days in the UK (or 46 days if they have not been a UK resident for the previous 3 tax years), they are considered non-residents.
International students may have income from sources such as employment, scholarships, or grants, which may be subject to UK tax. Generally, students are liable to pay UK tax and National Insurance contributions in the same way as other UK taxpayers. However, there are certain exemptions and special rules that may apply to international students.
For example, if an international student's country has a double taxation agreement with the UK, they may not need to pay UK tax on payments received from sources outside the UK for maintenance, education, and training. Additionally, for tax years up to and including 2024/25, students who are tax residents in the UK but are non-domiciled may escape UK tax on foreign income and gains up to £2,000 per year.
It is important to note that the rules and agreements can vary, and students should refer to the specific wording of the relevant agreements and guidance to understand their tax residence status and any applicable exemptions.
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Student loan repayments
International students in the UK are generally liable to pay UK tax and National Insurance contributions in the same way as other UK taxpayers. However, they usually do not pay UK tax on foreign income or gains as long as they are used for course fees or living costs. There are some double-taxation agreements in place, which mean that students do not pay UK tax on their income if they work while studying. If your country has such an agreement with the UK, you may not need to pay UK tax on payments received from abroad if they are for your maintenance, education, and training. The exemption may be limited in monetary terms or there may be a limit on the number of years it can be claimed.
If you are an international student who has taken out a UK student loan, you will have to make repayments through the UK tax system in the same way as any other UK student borrower, if you remain within the UK tax system after you finish your course (for example, if you find a job in the UK after your studies). Special rules apply if you are a resident overseas (and therefore not liable to UK tax) after completing your course.
If you are an international student in the UK, there are other financial options available to you, such as scholarships, grants, and bursaries. Scholarships are the most common form of funding available for international students and are usually awarded based on academic ability or potential, or talent in another field. Private grants are another option, as some companies and non-governmental organisations provide financial support to international students. If you take out a private loan, always read the agreement before signing, as these often come with repayment time limits and interest. Some universities also create their own student loan schemes for talented students from low-income backgrounds.
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Cash-in-hand jobs
International students in the UK are generally liable to pay taxes and National Insurance contributions in the same way as other taxpayers in the UK. However, there are certain exemptions and considerations for international students with foreign income or gains.
As an international student in the UK, if you are working a cash-in-hand job, you are still responsible for declaring this income to HM Revenue and Customs (HMRC) and paying the appropriate taxes. This means keeping accurate records of your income and ensuring that you comply with tax laws.
It is important to be aware that cash-in-hand jobs may not always be above board, and some employers may try to avoid paying taxes by paying their employees in cash. As an employee, it is your responsibility to ensure that you are complying with tax laws, even if your employer is not. If you are working in a cash-in-hand job, you should ensure that your employer is deducting the correct amount of tax and National Insurance through the Pay As You Earn (PAYE) system.
If you are unsure about your tax residence status or how your specific circumstances impact your tax obligations, you can refer to the guidance provided by the Low Incomes Tax Reform Group and HM Revenue and Customs (HMRC). They provide information on topics such as foreign income, exemptions, and the statutory residence test, which determines the tax residence status of individuals, including international students.
Additionally, if your country of origin has a double taxation agreement with the UK, you may be exempt from paying UK tax on your foreign income or gains. These agreements vary in their specific terms, so it is important to review the relevant agreement and keep records to demonstrate that any exemption claimed is justified.
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Frequently asked questions
Generally, international students in the UK with income or gains in the UK or overseas are liable to pay UK tax and National Insurance contributions just like other UK taxpayers. However, certain types of income are exempt from UK tax, such as income earned abroad if it is used for essential expenses like course fees, food, rent, etc. or if the income is from sources other than employment or investments, such as a scholarship or grant.
Students from countries with a double taxation agreement with the UK may benefit from tax exemptions on income earned in the UK. These agreements are designed to prevent individuals from being taxed twice on the same income, both in their home country and in the UK. You should check the wording of the relevant agreement as the exemption may be limited in monetary terms or there may be a limit on the number of years the exemption can be claimed.
The Personal Allowance is a certain amount of money that everyone is allowed to earn tax-free. For the 2025/26 tax year, you can earn up to £12,570 without needing to pay tax. If your income exceeds this amount, you will be liable to pay income tax.
If you are employed full-time during term time, your employer will deduct any tax owed from your paycheck every month. If you work part-time or are self-employed, you will need to pay taxes yourself either by filling out an annual Self Assessment tax return form or by arranging for your employer to take the money from your paycheck for each month that you worked during the year.
Cash-in-hand jobs often involve working without proper documentation or legal authorization, which is against UK immigration laws. Engaging in such work can jeopardize your visa status and result in serious consequences, including deportation. Cash-in-hand jobs also usually do not adhere to tax regulations, leading to under-reporting of income and non-payment of taxes, which can result in legal penalties.
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