UK Tax for Expats

If you are not British, and not living in the UK, but do some work in the UK, you will usually have to pay UK tax on the income earned here.  Musicians that come for a single day to play a concert in London still have to pay UK tax on that days work. 

As an Expat, if you are working in the UK but have not yet settled here, you are likely to be resident for tax purposes.  That means that as well as paying UK tax on UK income, you will have to pay UK tax on overseas income remitted to the UK. But you may have ‘Non Domiciled’ status that means you don’t necessarily have to pay UK tax on non-uk income that stays out of the UK.  This area has become more complex, and subject to paying a non-dom levy. If you are in this category you probably need bespoke specialist advice.

Whatever income is taxable in the UK will be subject to UK Income Tax at the rates detailed below.  For income from employment or self employment, there is also National Insurance (social security) to consider. 


Tax Rate

Typically Applies to this band of income


Annual Tax free Allowance


£0- £12,500

Basic rate of income tax on earned income



Higher rate of income tax on earned income


£50,001- £100,000



Withdrawal of tax free allowance

60% (de facto marginal rate)


Top rate of income tax on earned income




£150,001 and above


The sting in the tail is on earnings in the £100k – £125k band.   For every £1 earned above £100,000pa, the taxpayer not only has to pay 40p tax (40% of £1) on the income, but also loses 50p of their Tax free allowance.  So 50p that was previously tax free is now taxed at 40%, which is an extra 20p in tax. Giving a combined 40p+20p = 60p ie 60% tax. And that is before National Insurance is considered.

National Insurance (Social Security)  is payable in addition to income tax. There are different rates for employees and the Self employed.    Because the self employed pay less, the tax authorities have an incentive to classify some self employed people as being de-facto employees of their client.

Self employed National Insurance:

£3/week (ie £156 per year, as long as you are making at least £6,365 a year) plus  a profit-related element:

0% on profits up to £8,631pa

9% on profits between £8,632 and £50,000 pa

2% on profits over £50,000 pa


For employees, there is a cost to the individual and a cost to the employer

Employee’s National Insurance is:

0% on pay up to £165 per week

12% on pay between £166 and £962 per week

2% on profits over £962 per week


Employers National Insurance is:

13.8% on all pay above £166 per week


For an individual receiving a salary in the range £100,000-£125,000 per year, for every extra pound earned,  the government takes:

Income tax:    60p (see above)

Employee’s National Insurance:   2p

Employer’s National Insurance:   13.8p

TOTAL:    75.8p

From a total 113.8p paid by the employer, the individual pockets 38p.  38p/113.8p = 33.4%, in other words, the government gets 2/3rds of the cash.    So swapping salary for tax-free pension contributions is probably a good idea.  If you are an expat, you can probably take your UK pension assets ‘back home’ if you don’t stay here.  See our guide: 

NB. This general summary is no substitute for bespoke advice from a professional.  If you have complex or multi-country tax affairs, you should engage a qualified advisor.