International Student UK Tax Back

Are you an international student studying in the UK?

Did you know that some of you are entitled to earn in the UK, without paying any income tax?

What if I want to work in the UK while I am studying here?

Most students who earn over the UK Personal Allowance will pay UK income tax like everyone else. But some Double Taxation Treaties allow students to earn up to a certain amount tax free. It all depends on the double taxation treaty between the UK and your home country.

Currently, these countries are:

• Austria, Bangladesh, Bolivia, Bosnia-Herzegovina, Cyprus, Egypt, Finland, India, Indonesia, Jamaica, Kenya, Kuwait, Malaysia, Mauritius, Mongolia, Montenegro, Morocco, Nigeria, Pakistan, Philippines, Romania, Saudi Arabia, Serbia, Sri Lanka, Taiwan, Trinidad and Tobago, Tunisia and the United Arab Emirates.

It is important to know that the amount you can earn tax free in the UK (or the partner signatory’s country) varies enormously, as does the number of years this financial break can be applied to. You must check the treaty that is relevant to you.

What is a Double Taxation Agreement?

A Double Taxation Agreement is a treaty signed between two countries. If you are resident in one country and work in another, they prevent you having to pay income tax on the same earnings in both countries. So, you either pay income tax where you work, or where you are resident, you are not hit twice.

The UK has these agreements with many other countries, but they are not all the same. Most include a clause which states that any income you bring with you to support yourself while you are studying, is not liable for UK tax (and vice versa, if you are going from the UK to study in the other country).

What if my country doesn’t have a Double Taxation Agreement with the UK?

You may still be able to reclaim some UK income tax before you leave. Many UK taxpayers don’t realise how many work expenses tax reliefs and allowances apply to them and do not submit a tax rebate claim.

Most common tax reliefs successfully claimed for international students:

• Not using up your full Personal Allowance entitlement
• Using your own vehicle for work travel
• Other work related expenses like buying tools and equipment
• Belonging to a Trade Union or professional body, membership fees

How can I find out if my country has a Double Taxation Treaty with the UK?

All the agreements are listed on HMRC’s double taxation treaty list. It is important to know that they are not fixed documents. Amendments and entirely revised documents are added all the time, so you need to make sure that you are looking at the most current version.

What is the general tax situation for most students in the UK?

If your home country has a Double Taxation Agreement with the UK, then you will not be expected to account for income from home up to the amount of £15,000 per year. As long as the money is being spent on things that are considered general ‘maintenance’ or study, such as:

• Food
• Study materials (pens, paper, ink cartridges, books etc.)
• Rent and bills

This amount is on top of the cost of course fees.