As with most countries, the UK has its own taxation laws, which affect any income earned in the UK. myOE understands these laws and can help you manage your finances to help you make the most of your UK earnings.
Any income earned in the UK is generally subject to UK taxation regardless of your citizenship or place of residence. If you are not a UK resident and don’t ordinarily reside in the UK, this means the UK income tax liability is limited to any tax deducted at source on UK income (e.g. by your employer), together with any tax on income from a trade or profession carried on through a permanent establishment in the UK and tax on rental income from UK real estate. Most professionals in the UK on a working holiday will only have to consider tax deducted by your employer.
Individuals who are both resident and domiciled in the UK are additionally liable to taxation on their worldwide income and gains. For individuals resident but not domiciled in the UK (a “non-dom”), foreign income and gains have historically been taxed on the remittance basis, although the laws surrounding this have recently become stricter.
The tax year in the UK, which applies to income tax and other personal taxes, runs from 6 April to 5 April the following year. So for example, the 2010-11 tax year will run from 6 April 2010 to 5 April 2011. The tax year is sometimes also called the Fiscal Year. The Financial Year, used mainly for corporation tax purposes, runs from 1 April to 31 March (e.g. 1 April 2010 to 31 March 2011).
Income tax forms the bulk of revenues collected by the government. Each person has an income tax personal allowance, and income up to this amount in each tax year is free of tax for everyone. For 2010-11 the tax allowance for under 65s is £6,475. This reduces by £1 for every £2 of taxable income above £100,000. Above this amount there are a number of tax bands — each taxed at a different rate.