Tell HMRC about a change to your personal details

Change of name or address

How you contact HM Revenue and Customs (HMRC) to update your name or address depends on your situation.

You’ll also need to change your business records if you run a business.

This guide is also available in Welsh (Cymraeg).

You need to wait until you’ve moved or changed your name before telling HMRC.

If you’ve changed your address

Tell HMRC you’ve changed your address. If you submit a Self Assessment tax return as well your details will be updated for both.

There are different ways to tell HMRC if you:

only pay tax through Self Assessment

are a tax agent, for example an accountant

If you’ve changed your name

Tell HMRC your name has changed. If you submit a Self Assessment tax return as well your details will be updated for both.

You’ll need a Government Gateway user ID and password. If you do not have a user ID you can create one when you update your name.

only pay tax through Self Assessment

Your name will be updated automatically if you change gender.

What happens next

HMRC will update your personal records for:

Income Tax and National Insurance

tax credits and benefits, including Child Benefit

services, including the Pension Service

You’ll get an email to either:

confirm your change of details

ask for more information, for example legal documents for your name change

Income changes

You must tell HM Revenue and Customs (HMRC) about changes to your taxable income.

To do this you can either:

check your Income Tax and go to ‘Tell us about a change’

call HMRC

If you do not, you could pay too much tax or get a tax bill at the end of the year.

What you must tell HMRC

Your employer or pension provider tells HMRC when:

you start or finish your job

there’s a change in the money you earn from your job or get from your pension

But you must tell HMRC about any other changes, for example when you start or stop getting:

income from a new source, such as money from self-employment or rent from property

taxable benefits, such as State Pension, Jobseeker’s Allowance and Carer’s Allowance

benefits from your job, such as a company car

income above your Personal Allowance

money over £85,000 from self-employment (you must register for VAT over this amount)

lump sums from selling things you pay Capital Gains Tax on, such as shares or property that’s not your main home

income from property, money or shares you inherit, such as dividends from shares or rent from property

If you get tax credits

Tell HMRC separately about changes that affect your tax credits.

If your spouse or civil partner dies

Tell HMRC about changes to your income after the death of your husband, wife or civil partner.

If you make Self Assessment ‘payments on account’

Tell HMRC if you expect a big decrease in income and you pay your Self Assessment tax bill in advance (‘payments on account’). HMRC may decide to reduce your payments.

After you tell HMRC

HMRC may:

change your tax code and send you a PAYE Coding notice

tell you to send a Self Assessment tax return so they can bill you for tax you owe

send you a refund if you paid too much tax

Relationship or family changes

Tell HM Revenue and Customs (HMRC) if:

you get married or form a civil partnership

you divorce, separate or stop living with your husband, wife or partner

You can tell HMRC online if you’re paid a salary or pension through PAYE. If you submit a Self Assessment tax return as well, your details will be updated for both.

You’ll need:

a Government Gateway user ID and password - if you do not have a Government Gateway user ID, you can create one when you tell HMRC online

a National Insurance number (a temporary reference number will not work).

Tell HMRC straight away – if you do not, you could pay too much tax, or get a tax bill at the end of the year.

If you get tax credits or Child Benefit

Tell HMRC separately about changes to your relationship or family if you get:

tax credits

Child Benefit

If your spouse or civil partner dies

Contact HMRC to report:

changes to your income after their death

Gender change

HM Revenue and Customs (HMRC) is usually told automatically when you change gender legally by applying for a Gender Recognition Certificate.

Tell your employer at the same time - they must update your payroll records and National Insurance contributions.

HMRC will:

update its records with your gender and any name change

tell the Department for Work and Pensions (DWP)

restrict your records so only specialist staff at HMRC and DWP can access them

hand your tax affairs to HMRC’s Public Department 1

Once you get a letter confirming your records have moved, you can contact Public Department 1 with questions about your tax or National Insurance.

Tell HMRC yourself

You can write to Special Section D to tell HMRC:

about your legal gender change

about your name change only if you did not change gender legally

if you do not want them to restrict your records

Include your National Insurance number, and your original Gender Recognition Certificate if you’ve changed gender legally.


Claim Income Tax reliefs

Overview

‘Tax relief’ means that you either:

pay less tax to take account of money you’ve spent on specific things, like business expenses if you’re self-employed

get tax back or get it repaid in another way, like into a personal pension

You get some types of tax relief automatically - but some you must apply for.

When you can get tax relief

Tax relief applies to pension contributions, charity donations, maintenance payments and time spent working on a ship outside the UK.

It also applies to work or business expenses – you may be able to:

get tax relief on what you spend running your business if you’re self-employed (a sole trader or partner in a partnership)

claim tax relief if you’re employed and you use your own money for travel and things that you must buy for your job

Charity donations: tax relief

Donations to charity from individuals are tax free. You can get tax relief if you donate:

through Gift Aid

straight from your wages or pension, through Payroll Giving

Donations through Gift Aid

Charities and community amateur sports clubs (CASCs) can register with HM Revenue and Customs (HMRC) to be part of the Gift Aid scheme. When they’re registered, they can claim back the tax you’ve already paid on your donation.

The charity or CASC will give you a form to sign. They must also have an HMRC charity reference number - ask the charity or CASC if you’re not sure.

If the charity or CASC gets back more tax than you’ve paid, HMRC may ask you to pay more tax to cover the difference.

You pay Income Tax above the 20% basic rate

You can claim back the difference between the tax you’ve paid on the donation and what the charity got back when you fill in your Self Assessment tax return.

If you don’t fill in a Self Assessment tax return, call HMRC to tell them about your charity donations.

You get Married Couple’s Allowance

Your tax-free allowance may increase if you make donations through Gift Aid and claim Married Couple’s Allowance.

If you fill in a Self Assessment tax return, your allowance will be adjusted automatically if it needs to be.

If you don’t, call HMRC to tell them about your charity donations.

Payroll Giving schemes

If your employer or pension provider offers a Payroll Giving scheme, any donations you give through the scheme will be taken before Income Tax is taken off.

You’ll still pay National Insurance contributions on the amount of your donation. But you won’t pay any Income Tax on the amount you donate.

Maintenance payments: tax relief

Maintenance Payments Relief reduces your Income Tax if you make maintenance payments to an ex-spouse or civil partner.

You can get it if all of the following apply:

either of you were born before 6 April 1935

you’re paying maintenance under a court order after the relationship has ended

the payments are for the maintenance of your ex-spouse or former civil partner (provided they aren’t now remarried or in a new civil partnership) or for your children who are under 21

Maintenance Payments Relief is worth 10% of the maintenance you pay to your ex-spouse or civil partner, up to a maximum of £326 a year (or 10% of £3,260).

To claim it, call HM Revenue and Customs (HMRC).


Claim tax relief for your job expenses

Overview

You might be able to claim tax relief if:

you use your own money for things that you must buy for your job

you only use these things for your work

You cannot claim tax relief if your employer either gives you:

all the money back

an alternative, for example your employer gives you a laptop but you want a different type or model

This guide is also available in Welsh (Cymraeg).

You must have paid tax in the year. You’ll get tax relief based on what you’ve spent and the rate at which you pay tax.

For some claims, you must keep records of what you’ve spent. You must claim within 4 years of the end of the tax year that you spent the money.

If your claim is for the current tax year, HM Revenue and Customs (HMRC) will usually make any adjustments needed through your tax code.

If your claim is for previous tax years, HMRC will either make adjustments through your tax code or give you a tax refund.

Check if you can claim

Working from home

You may be able to claim tax relief for additional household costs if you have to work at home on a regular basis, either for all or part of the week. This includes if you have to work from home because of coronavirus (COVID-19).

You cannot claim tax relief if you choose to work from home.

You may be able to claim tax relief for:

gas and electricity

metered water

business phone calls, including dial-up internet access

You cannot claim for the whole bill, just the part that relates to your work.

You may also be able to claim tax relief on equipment you’ve bought, such as a laptop, chair or mobile phone.

How much you can claim

You can either claim tax relief on:

£6 a week from 6 April 2020 (for previous tax years the rate is £4 a week) - you will not need to keep evidence of your extra costs

the exact amount of extra costs you’ve incurred above the weekly amount - you’ll need evidence such as receipts, bills or contracts

You’ll get tax relief based on the rate at which you pay tax. For example, if you pay the 20% basic rate of tax and claim tax relief on £6 a week you would get £1.20 per week in tax relief (20% of £6).

Check if you can claim

Uniforms, work clothing and tools

You may be able to claim tax relief on the cost of:

repairing or replacing small tools you need to do your job (for example, scissors or an electric drill)

cleaning, repairing or replacing specialist clothing (for example, a uniform or safety boots)

You cannot claim relief on the initial cost of buying small tools or clothing for work.

Personal Protective Equipment (PPE)

You cannot claim tax relief for PPE. If your job requires you to use PPE your employer should either:

give you PPE free of charge

ask you to buy it and reimburse you the costs

How much you can claim

You can either claim:

the actual amount you’ve spent - you’ll need to keep receipts

an agreed fixed amount (a ‘flat rate expense’ or ‘flat rate deduction’)

Check if your job has an agreed flat rate expense.

Check if you can claim

Vehicles you use for work

You may be able to claim tax relief if you use cars, vans, motorcycles or bicycles for work.

This does not include travelling to and from your work, unless it’s a temporary place of work.

How much you can claim depends on whether you’re using:

a vehicle that you’ve bought or leased with your own money

a vehicle owned or leased by your employer (a company vehicle)

Using your own vehicle for work

If you use your own vehicle or vehicles for work, you may be able to claim tax relief on the approved mileage rate. This covers the cost of owning and running your vehicle. You cannot claim separately for things like:

fuel

electricity

road tax

MOTs

repairs

To work out how much you can claim for each tax year you’ll need to:

keep records of the dates and mileage or your work journeys

add up the mileage for each vehicle type you’ve used for work

take away any amount your employer pays you towards your costs, (sometimes called a ‘mileage allowance’)

Approved mileage rates

| First 10,000 business miles in the tax year | Each business mile over 10,000 in the tax year

Cars and vans | 45p | 25p

Motorcycles | 24p | 24p

Bicycles | 20p | 20p

Using a company car for business

You can claim tax relief on the money you’ve spent on fuel and electricity, for business trips in your company car. Keep records to show the actual cost of the fuel.

If your employer reimburses some of the money, you can claim relief on the difference.

Check if you can claim

Professional fees and subscriptions

You can claim tax relief on:

professional membership fees, if you must pay the fees to be able to do your job

annual subscriptions you pay to approved professional bodies or learned societies if being a member of that body or society is relevant to your job

You cannot claim tax relief on life membership subscriptions, or for professional membership fees or annual subscriptions you:

have not paid yourself (for example if your employer has paid for them)

have paid to professional organisations that are not approved by HMRC

Your organisation can tell you how much tax you’re allowed to claim back.

Check if you can claim

Travel and overnight expenses

If you have to travel for your work you may be able to claim tax relief on the cost or money you’ve spent on food or overnight expenses.

You cannot claim for travelling to and from work, unless you’re travelling to a temporary place of work.

You can claim tax relief for money you’ve spent on things like:

public transport costs

hotel accommodation if you have to stay overnight

food and drink

congestion charges and tolls

parking fees

business phone calls and printing costs

You may also be able to claim tax relief on business mileage.

Check if you can claim

Buying other equipment

In most cases you can claim tax relief on the full cost of substantial equipment, for example a computer, you have to buy to do your work. This is because it qualifies for a type of capital allowance called annual investment allowance.

You cannot claim capital allowances for cars, motorcycles or bicycles you use for work, but you may be able to claim for business mileage and fuel costs.

You claim in a different way for small items that’ll last less than 2 years, such as uniforms and tools.

You can only claim tax relief for equipment expenses if:

you need it to do your job

you use the equipment for work and there’s no significant private use - this includes using the equipment according to your organisation’s policy

If your employer gives you money for the item

Reduce the amount you claim tax relief on by the amount of money your employer gives you.

Check if you can claim


Income Tax

Overview

Income Tax is a tax you pay on your income. You do not have to pay tax on all types of income.

This guide is also available in Welsh (Cymraeg).

You pay tax on things like:

money you earn from employment

profits you make if you’re self-employed - including from services you sell through websites or apps

some state benefits

some grants, including the Self-Employment Income Support Scheme, the Small Business Grant Fund, the Retail, Hospitality and Leisure Grant Fund, the Coronavirus Job Retention Scheme and the Test and Trace Support Payment in England (or the Self-isolation Support Payment in Scotland and the Self-isolation Support Scheme in Wales)

most pensions, including state pensions, company and personal pensions and retirement annuities

rental income (unless you’re a live-in landlord and get less than the rent a room limit)

benefits you get from your job

income from a trust

interest on savings over your savings allowance

You do not pay tax on things like:

the first £1,000 of income from self-employment - this is your ‘trading allowance’

the first £1,000 of income from property you rent (unless you’re using the Rent a Room Scheme)

income from tax-exempt accounts, like Individual Savings Accounts (ISAs) and National Savings Certificates

dividends from company shares under your dividends allowance

some state benefits

premium bond or National Lottery wins

rent you get from a lodger in your house that’s below the rent a room limit

If you only occasionally sell items or rent out property (for example through auction websites or short-term rental apps), check if you need to tell HMRC about this income.

Income Tax allowances and reliefs

Most people in the UK get a Personal Allowance of tax-free income. This is the amount of income you can have before you pay tax.

The amount of tax you pay can also be reduced by tax reliefs if you qualify for them.

How you pay Income Tax

Pay As You Earn (PAYE)

Most people pay Income Tax through PAYE. This is the system your employer or pension provider uses to take Income Tax and National Insurance contributions before they pay your wages or pension. Your tax code tells your employer how much to deduct.

Tax on state benefits

Your tax code can take account of taxable state benefits, so if you owe tax on them (for example for the State Pension) it’s usually taken automatically from your other income.

If the State Pension is your only income, HM Revenue and Customs (HMRC) will write to you if you owe Income Tax. You may need to fill in a Self Assessment tax return.

Self Assessment tax returns

If your financial affairs are more complex (for example you’re self-employed or have a high income) you may pay Income Tax and National Insurance through Self Assessment. You’ll need to fill in a tax return every year.

You must also fill in a tax return if you earned more than either:

£1,000 from self-employment

£2,500 from other untaxed income, for example from tips or renting out a property

Contact the Income Tax helpline if your income from renting out a property was between £1,000 and £2,500.

Tax-free and taxable state benefits

State benefits that are taxable

The most common benefits that you pay Income Tax on are:

Bereavement Allowance (previously Widow’s pension)

Carer’s Allowance

contribution-based Employment and Support Allowance (ESA)

Incapacity Benefit (from the 29th week you get it)

Jobseeker’s Allowance (JSA)

pensions paid by the Industrial Death Benefit scheme

the State Pension

Widowed Parent’s Allowance

Tax-free state benefits

The most common state benefits you do not have to pay Income Tax on are:

Attendance Allowance

Bereavement support payment

Child Benefit (income-based - use the Child Benefit tax calculator to see if you’ll have to pay tax)

Child Tax Credit

Disability Living Allowance (DLA)

free TV licence for over-75s

Guardian’s Allowance

Housing Benefit

Income Support - though you may have to pay tax on Income Support if you’re involved in a strike

income-related Employment and Support Allowance (ESA)

Industrial Injuries Benefit

lump-sum bereavement payments

Maternity Allowance

Pension Credit

Personal Independence Payment (PIP)

Severe Disablement Allowance

Universal Credit

War Widow’s Pension

Winter Fuel Payments and Christmas Bonus

Working Tax Credit

Work out if you need to pay Income Tax

To work out if you should be paying Income Tax, follow these steps.

Add up all your taxable income, including taxable state benefits.

Work out your tax-free allowances.

Take your tax-free allowances away from your taxable income.

If there’s anything left, you’re a taxpayer. Contact the Income Tax helpline if you’re not already paying tax.

If there’s nothing left, you should not be paying tax and may be due a refund.

Check you're paying the right amount

You can see if you’re paying the right amount of Income Tax online. For the current tax year (6 April 2021 to 5 April 2022), you can:

check your Income Tax payments

work out how much Income Tax you should be paying

You can also:

check how much Income Tax you paid last year (6 April 2020 to 5 April 2021)

estimate how much Income Tax you should have paid in a previous year

If you cannot use these services, you can check you’ve paid the right tax by contacting HMRC or by getting help from an accountant.

There’s a different way to change a Self Assessment tax return.


Income Tax in Scotland

Current rates

You pay Scottish Income Tax if you live in Scotland. It’s paid to the Scottish Government.

Scottish Income Tax applies to your wages, pension and most other taxable income.

You’ll pay the same tax as the rest of the UK on dividends and savings interest.

What you’ll pay

The table shows the 2021 to 2022 Scottish Income Tax rates you pay in each band if you have a standard Personal Allowance of £12,570. You do not get a Personal Allowance if you earn over £125,140.

Band | Taxable income | Scottish tax rate

Personal Allowance | Up to £12,570 | 0%

Starter rate | £12,571 to £14,667 | 19%

Basic rate | £14,668  to £25,296 | 20%

Intermediate rate | £25,297  to £43,662 | 21%

Higher rate | £43,663 to £150,000 | 41%

Top rate | over £150,000 | 46%

Who pays

You may also pay Scottish Income Tax if you:

move to or from Scotland

live in a home in Scotland and one elsewhere in the UK, for example for work

do not have a home and stay in Scotland regularly, for example you stay offshore or in hotels

How you pay

If you’re employed or get a pension, your tax code will start with an ‘S’. This tells your employer or pension provider to deduct tax at the Scottish rate.

Your tax code will be S1250L if you pay Scottish Income Tax and get the standard Personal Allowance of £12,500.

If you fill in an online Self Assessment tax return, there’s a box for you to tell HMRC that you pay Scottish Income Tax.

The tax year is from 6 April to 5 April the following year.

If you move to or from Scotland

You pay Scottish Income Tax if you move to Scotland and live there for a longer period than anywhere else in the UK during a tax year (6 April to 5 April the following year).

You must tell HMRC of your new address if you move to or from Scotland. You may pay tax at the wrong rate if you do not.

If HMRC changes your tax rate

The new rate you pay will be backdated to the start of the tax year (6 April) in which you moved. The tax taken from your wages or pension will be adjusted automatically so you pay the right amount across the whole year.

If you live in more than one home

You need to know which is your main home if you have one in Scotland and one somewhere else in the UK.

What counts as your main home

Your main home is usually where you live and spend most of your time.

It does not matter whether you own it, rent it or live in it for free.

Your main home may be the home where you spend less time if that’s where:

most of your possessions are

your family lives, if you’re married or in a civil partnership

you’re registered for things like your bank account, GP or car insurance

you’re a member of clubs or societies

This might apply to you if you live away because of your work, for example you’re a lorry driver, an offshore worker or in the armed forces.

You can contact HMRC to change which home counts as your main one.

If you’re not sure which is your main home

HMRC has detailed information about working out which is your main home, including if:

you’re a mobile worker, for example your job means you travel most of the time

you’re a student

you do not have a permanent home

2020 to 2021 tax year

You pay a different rate of tax for income from the tax year 6 April 2020 to 5 April 2021.

Personal Allowance | Up to £12,500 | 0%

Starter rate | £12,501 to £14,585 | 19%

Basic rate | £14,586 to £25,158 | 20%

Intermediate rate | £25,159 to £43,430 | 21%

Higher rate | £43,431 to £150,000 | 41%

Top rate | over £150,000 | 46%

It applies to your wages, pension and most other taxable income.

You pay the same tax as the rest of the UK on dividends and savings interest.


Income Tax rates and Personal Allowances

Current rates and allowances

How much Income Tax you pay in each tax year depends on:

how much of your income is above your Personal Allowance

how much of your income falls within each tax band

Some income is tax-free.

The current tax year is from 6 April 2021 to 5 April 2022.

Your tax-free Personal Allowance

The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.

Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance. It’s smaller if your income is over £100,000.

Income Tax rates and bands

The table shows the tax rates you pay in each band if you have a standard Personal Allowance of £12,570.

Income tax bands are different if you live in Scotland.

Band | Taxable income | Tax rate

Personal Allowance | Up to £12,570 | 0%

Basic rate | £12,571 to £50,270 | 20%

Higher rate | £50,271 to £150,000 | 40%

Additional rate | over £150,000 | 45%

You can also see the rates and bands without the Personal Allowance. You do not get a Personal Allowance on taxable income over £125,140.

If you’re employed or get a pension

Check your Income Tax to see:

your Personal Allowance and tax code

how much tax you’ve paid in the current tax year

how much you’re likely to pay for the rest of the year

Other allowances

You have tax-free allowances for:

savings interest

dividends, if you own shares in a company

You may also have tax-free allowances for:

your first £1,000 of income from self-employment - this is your ‘trading allowance’

your first £1,000 of income from property you rent (unless you’re using the Rent a Room Scheme)

Find out whether you’re eligible for the trading and property allowances.

You pay tax on any interest, dividends or income over your allowances.

Paying less Income Tax

You may be able to claim Income Tax reliefs if you’re eligible for them.

If you’re married or in a civil partnership

You may be able to claim Marriage Allowance to reduce your partner’s tax if your income is less than the standard Personal Allowance.

If you do not claim Marriage Allowance and you or your partner were born before 6 April 1935, you may be able to claim Married Couple’s Allowance.

Previous tax years

The standard Personal Allowance from 6 April 2020 to 5 April 2021 was £12,500.

Tax rate | Taxable income above your Personal Allowance for 2020 to 2021

Basic rate 20% | £0 to £37,500 People with the standard Personal Allowance started paying this rate on income over £12,500

Higher rate 40% | £37,501 to £150,000 People with the standard Personal Allowance started paying this rate on income over £50,000

Additional rate 45% | Over £150,000

Your Personal Allowance would have been smaller if your income was over £100,000, or bigger if you got Marriage Allowance or Blind Person’s Allowance.

Other rates and earlier tax years

HM Revenue and Customs (HMRC) publishes tables with full rates and allowances for current and past tax years.

Income over £100,000

Your Personal Allowance goes down by £1 for every £2 that your adjusted net income is above £100,000. This means your allowance is zero if your income is £125,140 or above.

You’ll also need to do a Self Assessment tax return.

If you do not usually send a tax return, you need to register by 5 October following the tax year you had the income.

Register for Self Assessment

You’ll get a letter telling you what to do next after you’ve registered.

Register now


Individual Savings Accounts (ISAs)

Overview

You can save tax-free with Individual Savings Accounts (ISAs).

In the 2021 to 2022 tax year, the maximum you can save in ISAs is £20,000

There are 4 types of ISA:

cash ISAs

stocks and shares ISAs

innovative finance ISAs

Lifetime ISAs

You can put money into one of each kind of ISA each tax year.

Who can open an ISA

You must be:

16 or over for a cash ISA

18 or over for a stocks and shares or innovative finance ISA

18 or over but under 40 for a Lifetime ISA

You must also be either:

resident in the UK

a Crown servant (for example diplomatic or overseas civil service) or their spouse or civil partner if you do not live in the UK

You cannot hold an ISA with or on behalf of someone else.

You can get a Junior ISA for children under 18.

Opening and managing an ISA for someone who lacks the mental capacity to do this for themselves

A close friend or relative can apply to the Court of Protection (COP) for a financial deputyship order to open and manage an ISA for someone who cannot do this for themselves.

In Scotland, applications need to be made to the Office of the Public Guardian in Scotland.

In Northern Ireland, applications need to be made to the Office of Care and Protection.

How ISAs work

There are 4 types of Individual Savings Accounts (ISA):

cash ISA

stocks and shares ISA

innovative finance ISA

Lifetime ISA

You do not pay tax on:

interest on cash in an ISA

income or capital gains from investments in an ISA

If you complete a tax return, you do not need to declare any ISA interest, income or capital gains on it.

Putting money into an ISA

Every tax year you can put money into one of each kind of ISA. The tax year runs from 6 April to 5 April.

You can save up to £20,000 in one type of account or split the allowance across some or all of the other types.

You can only pay £4,000 into your Lifetime ISA in a tax year.

Your ISAs will not close when the tax year finishes. You’ll keep your savings on a tax-free basis for as long as you keep the money in your ISA accounts.

What you can include in your ISAs

Cash ISAs can include:

savings in bank and building society accounts

some National Savings and Investments products

Stocks and shares ISAs can include:

shares in companies

unit trusts and investment funds

corporate bonds

government bonds

You cannot transfer any non-ISA shares you already own into an ISA unless they’re from an employee share scheme.

Lifetime ISAs may include either:

cash

stocks and shares

Innovative finance ISAs include:

peer-to-peer loans - loans that you give to other people or businesses without using a bank

‘crowdfunding debentures’ - investing in a business by buying its debt

You cannot transfer any peer-to-peer loans you’ve already made or crowdfunding debentures you already hold into an innovative finance ISA.

If you have questions about the tax rules for ISAs, you can call the ISA Helpline.

How to open an ISA

You can get an Individual Savings Account (ISA) from:

banks

building societies

credit unions

friendly societies

stock brokers

peer-to-peer lending services

crowdfunding companies

other financial institutions

Contact your provider directly for more information about how to open an ISA with them.

Withdrawing your money

You can take your money out of an Individual Savings Account (ISA) at any time, without losing any tax benefits. Check the terms of your ISA to see if there are any rules or charges for making withdrawals.

There are different rules for taking your money out of a Lifetime ISA.

If your ISA is ‘flexible’, you can take out cash then put it back in during the same tax year without reducing your current year’s allowance. Your provider can tell you if your ISA is flexible.

Transferring your ISA

You can transfer your Individual Savings Account (ISA) from one provider to another at any time.

You can transfer your savings to a different type of ISA or to the same type of ISA.

If you want to transfer money you’ve invested in an ISA during the current year, you must transfer all of it.

For money you invested in previous years, you can choose to transfer all or part of your savings.

If you transfer cash and assets from a Lifetime ISA to a different ISA before the age of 60, you’ll have to pay a withdrawal fee of 25%.

Restrictions on what you can transfer

You can transfer cash from your innovative finance ISA to another provider - but you may not be able to transfer other investments from it.

Check with your provider for any restrictions they may have on transferring ISAs. They may also make you pay a charge.

How to transfer your ISA

To switch providers, contact the ISA provider you want to move to and fill out an ISA transfer form to move your account. If you withdraw the money without doing this, you will not be able to reinvest that part of your tax-free allowance again.

Deadlines and complaints

ISA transfers should take no longer than:

15 working days for transfers between cash ISAs

30 calendar days for other types of transfer

If you want to transfer investments held in an innovative finance ISA, ask your provider how long it will take.

If your transfer takes longer than it should, contact your ISA provider.

If you’re unhappy with the response, you can take the matter up with the Financial Ombudsman Service.

If you move abroad

If you open an Individual Savings Account (ISA) in the UK then move abroad, you cannot put money into it after the tax year that you move (unless you’re a Crown employee working overseas or their spouse or civil partner).

You must tell your ISA provider as soon as you stop being a UK resident.

However, you can keep your ISA open and you’ll still get UK tax relief on money and investments held in it.

You can transfer an ISA to another provider even if you are not resident in the UK.

You can pay into your ISA again if you return and become a UK resident (subject to the annual ISA allowance).

If you die

Your ISA will end when either:

your executor closes it

the administration of your estate is completed

Otherwise, your ISA provider will close your ISA 3 years and 1 day after you die.

There will be no Income Tax or Capital Gains Tax to pay up to that date, but ISA investments will form part of your estate for Inheritance Tax purposes.

Stocks and shares ISAs

Your ISA provider can be instructed to either:

sell the investments and pay the proceeds to the administrator or beneficiary of your estate

transfer the investments to your surviving spouse’s or civil partner’s ISA - this is only possible if they have the same ISA provider as you

Check the terms and conditions of your ISA for details.

Inheriting an ISA from your spouse or civil partner

If your spouse or civil partner dies you can inherit their ISA allowance.

As well as your normal ISA allowance you can add a tax-free amount up to either:

the value of their ISA when it’s closed

Contact your ISA provider or the provider of your spouse or civil partner’s ISA for details.

If your spouse or civil partner died from 3 December 2014 to 5 April 2018

Their ISA ended on the date of their death. ISA investments will form part of their estate for Inheritance Tax purposes.

Their ISA provider can be instructed to sell the investments and either:

pay the proceeds to the administrator or beneficiary of their estate

transfer the investments directly to them

You can inherit their ISA allowance. As well as your normal ISA allowance, you can add a tax-free amount up to the value they held in their ISA when they died.


Marriage Allowance

How it works

Marriage Allowance lets you transfer £1,260 of your Personal Allowance to your husband, wife or civil partner.

This reduces their tax by up to £252 in the tax year (6 April to 5 April the next year).

This guide is also available in Welsh (Cymraeg).

To benefit as a couple, you (as the lower earner) must normally have an income below your Personal Allowance - this is usually £12,570.

You can calculate how much tax you could save as a couple. You should call the Income Tax helpline instead if you receive other income such as dividends, savings or benefits from your job. You can also call if you do not know what your taxable income is.

When you transfer some of your Personal Allowance to your husband, wife or civil partner you might have to pay more tax yourself, but you could still pay less as a couple.

Who can apply

You can benefit from Marriage Allowance if all the following apply:

you’re married or in a civil partnership

you do not pay Income Tax or your income is below your Personal Allowance (usually £12,570)

your partner pays Income Tax at the basic rate, which usually means their income is between £12,571 and £50,270 before they receive Marriage Allowance

You cannot claim Marriage Allowance if you’re living together but you’re not married or in a civil partnership.

If you’re in Scotland, your partner must pay the starter, basic or intermediate rate, which usually means their income is between £12,571 and £43,662.

It will not affect your application for Marriage Allowance if you or your partner:

are currently receiving a pension

live abroad - as long as you get a Personal Allowance.

If you or your partner were born before 6 April 1935, you might benefit more as a couple by applying for Married Couple’s Allowance instead.

You cannot get Marriage Allowance and Married Couple’s Allowance at the same time.

Backdating your claim

You can backdate your claim to include any tax year since 5 April 2017 that you were eligible for Marriage Allowance.

Your partner’s tax bill will be reduced depending on the Personal Allowance rate for the years you’re backdating.

If your partner has died since 5 April 2017 you can still claim - phone the Income Tax helpline. If your partner was the lower earner, the person responsible for managing their tax affairs needs to phone.

Stopping Marriage Allowance

Your Personal Allowance will transfer automatically to your partner every year until you cancel Marriage Allowance - for example if your income changes or your relationship ends.

How to apply

It’s free to apply for Marriage Allowance.

If both of you have no income other than your wages, then the person who earns the least should make the claim.

If either of you gets other income, such as dividends or savings, you may need to work out who should claim. You can call the Income Tax helpline if you’re unsure.

Changes to your Personal Allowances will be backdated to the start of the tax year (6 April) if your application is successful.

How your Personal Allowances change

HM Revenue and Customs (HMRC) will give your partner the allowance you have transferred to them either:

by changing their tax code - this can take up to 2 months

when they send their Self Assessment tax return

If your new Personal Allowance is lower than your income after you’ve made a claim, you might have to pay some income tax. However, you might still benefit as a couple.

How your tax code will change

You and your partner will get new tax codes that reflect the transferred allowance. Your tax code will end with:

‘M’ if you are receiving the allowance

‘N’ if you are transferring the allowance

Your tax code will also change if you’re employed or get a pension.

If your circumstances change

You must cancel Marriage Allowance if any of the following apply:

your relationship ends - because you’ve divorced, ended (‘dissolved’) your civil partnership or legally separated

your income changes and you’re no longer eligible

you no longer want to claim

If your income changes and you’re not sure if you should still claim, call HMRC Marriage Allowance enquiries.

How to cancel

Either of you can cancel if your relationship has ended.

If you’re cancelling for another reason, the person who made the claim must cancel.

Online

You can cancel Marriage Allowance online. You’ll be asked to prove your identity using information HMRC holds about you.

By phone

Contact Marriage Allowance enquiries to cancel or get help.

After you cancel

If you cancel because of a change of income, the allowance will run until the end of the tax year (5 April).

If your relationship has ended, the change may be backdated to the start of the tax year (6 April).

This might mean you or your partner underpays tax for the year.

If your partner dies

If your partner dies after you’ve transferred some of your Personal Allowance to them:

their estate will be treated as having the increased Personal Allowance

your Personal Allowance will go back to the normal amount

If your partner transferred some of their Personal Allowance to you before they died:

your Personal Allowance will remain at the higher level until the end of the tax year (5 April)

their estate will be treated as having the smaller amount


Married Couple's Allowance

Overview

Married Couple’s Allowance could reduce your tax bill by between £353 and £912.50 a year.

You can claim Married Couple’s Allowance if all the following apply:

you’re living with your spouse or civil partner

one of you was born before 6 April 1935

For marriages before 5 December 2005, the husband’s income is used to work out Married Couple’s Allowance. For marriage and civil partnerships after this date, it’s the income of the highest earner.

If you and your partner were born on or after 6 April 1935, you may be able to claim Marriage Allowance instead.

What you'll get

Married Couple’s Allowance could reduce your tax bill each year if you’re married or in a civil partnership.

For the 2021 to 2022 tax year, it could cut your tax bill by between £353 and £912.50 a year.

Use the Married Couple’s Allowance calculator to work out what you could get.

If you marry or register a civil partnership, you’ll get the allowance on a pro-rata basis for the rest of that tax year.

If one of you dies or you divorce or separate, the allowance continues until the end of the tax year.

You can transfer your Married Couple’s Allowance to your spouse or civil partner.

If you and your spouse or civil partner are separated through circumstance rather than through a decision to formally separate, you can still claim Married Couple’s Allowance.

Eligibility

one of you was born before 6 April 1935

You can still claim Married Couple’s Allowance if you’re unable to live with your spouse or civil partner because of:

illness or old age, for example where your spouse or partner is in residential care

working away from home

an armed forces posting

being in prison

training or education

How to claim

If you fill in a Self Assessment tax return each year

Claim by completing the Married Couple’s Allowance section of the tax return.

If you do not fill in a Self Assessment tax return each year

Contact HM Revenue & Customs (HMRC) with details of your:

marriage or civil partnership ceremony

spouse or civil partner - including their date of birth

Further information

Transfer unused Married Couple’s Allowance after the tax year ends

If your spouse or civil partner pays tax, you can transfer any Married Couple’s Allowance that you have not used because:

you do not pay tax

your tax bill is not high enough

Fill in form 575 or ask HM Revenue and Customs (HMRC) to post you a copy.

Share or transfer your Married Couple’s Allowance before the tax year starts

You and your spouse (or civil partner) can:

share the minimum Married Couple’s Allowance

transfer the whole of the minimum Married Couple’s Allowance from one to the other

Fill in form 18 before the start of the tax year. You can also contact HMRC to get a copy in the post.

Tax allowances and giving to charity

If you pay tax and give money to a UK charity using Gift Aid, contact HMRC. It can increase the tax allowances if you were born before 6 April 1938.


National Insurance and tax after State Pension age

Overview

You do not pay National Insurance after you reach State Pension age - unless you’re self-employed and pay Class 4 contributions. You stop paying Class 4 contributions at the end of the tax year in which you reach State Pension age.

You only pay Income Tax if your taxable income - including your private pension and State Pension - is more than your tax-free allowances (the amount of income you’re allowed before you pay tax).

You must contact HM Revenue and Customs (HMRC) if you think you should be paying tax.

Stop paying National Insurance

You pay National Insurance contributions to qualify for certain benefits including the State Pension.

If you’re employed, you pay Class 1 National Insurance contributions as a percentage of your earnings up to State Pension age.

If you’re self-employed, you pay Class 2 contributions at a flat weekly rate and Class 4 contributions annually as a percentage of your taxable profits.

What happens at State Pension age

You stop paying Class 1 and Class 2 contributions when you reach State Pension age - even if you’re still working.

You’ll continue paying Class 4 contributions until the end of the tax year in which you reach State Pension age.

For example, you reach State Pension age on 6 September 2021. You’ll stop making Class 4 contributions on 5 April 2022 and pay your final Class 4 bill by 31 January 2023, together with your Income Tax.

If you’re self employed, you still need to send a Self Assessment tax return for each year you work - even after you reach State Pension age.

You can claim back National Insurance if you’ve overpaid.

If you continue working

Show your employer proof of your age (a birth certificate or passport, for example) to make sure you stop paying National Insurance.

If you do not want your employer to see your birth certificate or passport, HM Revenue and Customs (HMRC) can send you a letter to show them instead.

The letter will confirm:

you’ve reached State Pension age

you do not need to pay National Insurance

You’ll need to write to HMRC explaining why you do not want your employer to see your birth certificate or passport.

You’ll be asked to send your birth certificate or passport for verification if HMRC does not have a record of your date of birth. Certified copies are accepted.

You can also show a certificate of age exception (CA4140) if you have one.

Age-related tax allowances

Married Couple’s Allowance

You can claim the Married Couple’s Allowance if you’re married or in a civil partnership and at least one partner was born before 6 April 1935. It gets taken off your tax bill - the amount that’s deducted depends on your income.

Maintenance Payments Relief

You can get an allowance to reduce your tax bill for maintenance payments you make to an ex-spouse or civil partner if:

you or they were born before 6 April 1935

you’re separated or divorced and you’re making payments under a court order

the payments are for the maintenance of your ex-partner (as long as they have not re-married or formed a new civil partnership) or your children are under 21

How much you can get

For the 2021 to 2022 tax year Maintenance Payments Relief can reduce your tax bill by the lower of the following:

£353 - where you make maintenance payments of £3,530 or more a year

10% of the money you’ve actually paid - where you make payments of less than £3,530 a year

You cannot claim a tax reduction for any voluntary payments you make.

Claim back tax or National Insurance

National Insurance refunds

You can claim back any overpaid National Insurance.

Tax refunds

You can claim a tax refund if you’ve:

had too much deducted from your pension

overpaid through your job

If you complete a tax return, you can also correct mistakes and claim a refund via Self Assessment.

Claiming back tax on savings interest

If you’re on a low income, you may be able to get tax-free interest or get some tax back from interest on your savings.


P45, P60 and P11D forms: workers' guide

You’ll get a P45 from your employer when you stop working for them.

There’s a separate guide to getting P45s if you’re an employer.

Your P45 shows how much tax you’ve paid on your salary so far in the tax year (6 April to 5 April).

A P45 has 4 parts (Part 1, Part 1A, Part 2 and Part 3).

Your employer sends details for Part 1 to HM Revenue and Customs (HMRC) and gives you the other parts.

You give Part 2 and 3 to your new employer (or to Jobcentre Plus if you’re not working).

Keep Part 1A for your own records.

By law your employer must give you a P45 - ask them for one.

You can check how much tax you paid last year if you think you might have paid too much.

You do not have a P45

You will not have a P45 if you’re starting your first job or you’re taking on a second job. Your employer will need to work out how much tax you should be paying on your salary.

They may use a ‘Starter Checklist’ to collect the information, or may collect it another way. The Starter Checklist has questions about any other jobs, benefits or student loans you have. It helps your employer work out your correct tax code before your first payday.

Your P60 shows the tax you’ve paid on your salary in the tax year (6 April to 5 April). You get a separate P60 for each of your jobs.

There’s a separate guide to getting P60s if you’re an employer.

If you’re working for an employer on 5 April they must give you a P60. They must provide this by 31 May, on paper or electronically.

You’ll need your P60 to prove how much tax you’ve paid on your salary, for example:

to claim back overpaid tax

to apply for tax credits

as proof of your income if you apply for a loan or a mortgage

Your employer might give you a copy of your P11D if they used it to tell HM Revenue and Customs (HMRC) about your ‘benefits in kind’ (for example company cars or interest-free loans).

They do not have to do this, but they must tell you how much each benefit is worth.

There’s a separate guide to getting form P11D if you’re an employer.

You might not get a P11D if your employer takes the tax you owe on your benefits out of your pay.

Your employer will write to you to explain how this works.

Lost PAYE forms

Lost P45

You cannot get a replacement P45.

Instead, your new employer may give you a ‘Starter Checklist’ or ask you for the relevant details about your finances to send to HM Revenue and Customs (HMRC).

Lost P60

You can get a replacement P60 from your employer.

You can usually get a copy of the P11D from your employer. If they cannot give you one, you can contact HMRC for a copy.


Self Assessment tax returns

Overview

Self Assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax.

Tax is usually deducted automatically from wages, pensions and savings. People and businesses with other income must report it in a tax return.

If you need to send one, you fill it in after the end of the tax year (5 April) it applies to.

This guide is also available in Welsh (Cymraeg).

Sending your return

File your tax return online or send a paper form.

If your business has been affected by coronavirus (COVID-19), you may be able to claim a grant through the Self-Employment Income Support Scheme.

Deadlines

Send your tax return by the deadline.

If you did not send an online return last year, allow extra time (up to 20 working days) as you’ll need to register first. There are different ways to register if you’re:

self-employed or a sole trader

not self-employed

registering a partner or partnership

Filling in your return

You need to keep records (for example bank statements or receipts) so you can fill in your tax return correctly.

You can get help filling in your return.

Paying your bill

HMRC will calculate what you owe based on what you report.

Pay your Self Assessment bill by 31 January.

How much tax you pay will depend on the Income Tax band you’re in. There’s a different rate for Capital Gains Tax if you need to pay it, for example you sell shares or a second home.

Who must send a tax return

You must send a tax return if, in the last tax year (6 April to 5 April), you were:

self-employed as a ‘sole trader’ and earned more than £1,000  (before taking off anything you can claim tax relief on)

a partner in a business partnership

You will not usually need to send a return if your only income is from your wages or pension. But you may need to send one if you have any other untaxed income, such as:

money from renting out a property

tips and commission

income from savings, investments and dividends

foreign income

Check if you need to send a tax return if you’re not sure.

Other reasons for sending a return

You can choose to fill in a tax return to:

claim some Income Tax reliefs

prove you’re self-employed, for example to claim Tax-Free Childcare or Maternity Allowance

If you get Child Benefit

If your income (or your partner’s, if you have one) was over £50,000, you may need to send a return and pay the High Income Child Benefit Charge.

Registering and sending a return

You need to register if you did not send a tax return last year. There are different ways to register if you’re:

self-employed or a sole trader

not self-employed

registering a partner or partnership

If you’re new to Self Assessment, you’ll need to keep records (for example bank statements or receipts) so you can fill in your tax return correctly.

Sending your return

Once you’ve registered, you can send your tax return online, or use commercial software or paper forms. You then have to pay your bill by the deadline.

Using commercial software or paper forms

You can send a return using commercial software or paper forms.

You must use one of these options to send returns:

for a partnership

for a trust and estate

if you get income from a trust

if you lived abroad as a non-resident

if you’re a Lloyd’s underwriter

if you’re a religious minister

to report profits made on selling or disposing of more than one asset (‘chargeable gains’)

You must use a paper form if you need to send a tax return for trustees of registered pension schemes (SA970).

The deadline for paper forms is 31 October (or 31 January if you’re a trustee of a registered pension scheme or a non-resident company).

Deadlines

HM Revenue and Customs (HMRC) must receive your tax return and any money you owe by the deadline.

The last tax year started on 6 April 2020 and ended on 5 April 2021.

Self Assessment | Deadline

Register for Self Assessment if you’re self-employed or a sole trader, not self-employed, or registering a partner or partnership | 5 October 2021

Paper tax returns | Midnight 31 October 2021

Online tax returns | Midnight 31 January 2022

Pay the tax you owe | Midnight 31 January 2022

There’s usually a second payment deadline of 31 July if you make advance payments towards your bill (known as ‘payments on account’).

You’ll usually pay a penalty if you’re late. You can appeal against a penalty if you have a reasonable excuse.

When the deadline is different

Submit your online return by 30 December if you want HMRC to automatically collect tax you owe from your wages and pension. You must be eligible.

HMRC must receive a paper tax return by 31 January if you’re a trustee of a registered pension scheme or a non-resident company. You cannot send a return online.

HMRC might also email or write to you giving you a different deadline.

Partnership returns if you have a company as a partner

If your partnership’s accounting date is between 1 February and 5 April and one of your partners is a limited company, the deadline for:

online returns is 12 months from the accounting date

paper returns is 9 months from the accounting date

2019 to 2020 tax year and earlier

The Self Assessment deadline for these tax years has passed. Send your tax return or payment as soon as possible - you’ll have to pay a penalty.

Penalties

You’ll get a penalty if you need to send a tax return and you miss the deadline for submitting it or paying your bill.

You’ll pay a late filing penalty of £100 if your tax return is up to 3 months late. You’ll have to pay more if it’s later, or if you pay your tax bill late.

You’ll be charged interest on late payments.

Estimate your penalty for Self Assessment tax returns more than 3 months late, and late payments.

You can appeal against a penalty if you have a reasonable excuse.

All partners can be charged a penalty if a partnership tax return is late.

If you need to change your return

You can make a change to your tax return after you’ve filed it, for example because you made a mistake. You’ll need to make your changes by:

31 January 2022 for the 2019 to 2020 tax year

31 January 2023 for the 2020 to 2021 tax year

If you miss the deadline or if you need to make a change to your return for any other tax year you’ll need to write to HMRC.

Your bill will be updated based on what you report. You may have to pay more tax or be able to claim a refund.

There’s a different process if you need to report foreign income.

Updating your tax return

How you update your tax return depends on how you filed it.

Online tax returns

Sign in using your Government Gateway user ID and password.

From ‘Your tax account’, choose ’Self Assessment account’ (if you do not see this, skip this step).

Choose ‘More Self Assessment details’.

Choose ‘At a glance’ from the left-hand menu.

Choose ‘Tax return options’.

Choose the tax year for the return you want to amend.

Go into the tax return, make the corrections and file it again.

Paper tax returns

Download a new tax return, and send HMRC the corrected pages. Write ‘amendment’ on each page, and include your name and Unique Taxpayer Reference (UTR) - this is on previous tax returns or letters from HMRC.

Check your Self Assessment paperwork for the address. If you cannot find this, send your corrections to the address for general Self Assessment enquiries.

If you used commercial software

Contact the software provider for help correcting your tax return. Contact HMRC if your software is not able to make corrections.

Write to HMRC

Write to HMRC if you need to make a change to your tax return from the 2018 to 2019 tax year or earlier.

Include in your letter:

the tax year you’re correcting

why you think you’ve paid too much or little tax

how much you think you’ve over or underpaid

You can claim a refund up to 4 years after the end of the tax year it relates to. If you’re making a claim, also include in your letter:

that you’re making a claim for ‘overpayment relief’

proof that you’d paid tax through Self Assessment for the relevant period

how you want to be repaid

that you have not previously tried to claim back this refund

a signed declaration saying that the details you’ve given are correct and complete to the best of your knowledge

Changes to your bill

You’ll see your amended bill straight away if you updated your tax return online. Within 3 days, your statement will also show:

the difference from the old one, so you can see whether you owe more or less tax

any interest

To view this, sign in using your Government Gateway user ID and password and choose ‘View statements’ from the left-hand menu.

If you’re owed tax

To claim a refund, go to ‘Request a repayment’ from the left-hand menu within your HMRC online account. Allow 4 weeks for your refund to be sent to your bank account.

You may not get a refund if you have tax due in the next 35 days (for example for a payment on account). Instead, the money will be deducted from the tax you owe.

If you need to pay more tax

Your updated bill will also show:

the deadline for paying

the effect on any payments on account you need to make

If you sent an updated paper return

HMRC will send you an updated bill within 4 weeks. They’ll also pay any refund directly into your bank account, as long as you included your bank details on tax return.

How to get help

If you need help with Self Assessment, you can:

appoint someone to fill in and send your tax return, for example an accountant, friend or relative - you can find an accountant accredited in the UK

watch videos and join webinars

contact HM Revenue and Customs (HMRC) for general Self Assessment enquiries

get help with your online account

Help filling in your return

There’s introductory guidance on GOV.UK to:

Capital Gains Tax if you’ve sold certain things like property or shares

expenses if you’re an employee or self-employed

Child Benefit if your income’s over £50,000

tax on income from renting property

tax on savings interest

tax returns for business partnerships

tax on income from abroad - or on your UK income if you live abroad

Guidance notes and helpsheets

You can also read guidance in:

the notes for each section of the tax return, for example ‘UK property notes’ if you’re completing that section

HMRC’s Self Assessment helpsheets

Returns for someone who has died

You must report a death to HM Revenue and Customs (HMRC) as soon as possible if you’re dealing with the tax affairs of someone who’s died.

HMRC will tell you if you need to fill in a Self Assessment tax return on the deceased’s behalf. If you do, they’ll send you a return form and a letter with instructions.

Contacting HMRC

If you use the Tell Us Once service you do not need to contact HMRC separately.

If you do not use the Tell Us Once service contact HMRC.

Tell HMRC the:

date of death

name and address of who to contact

You’ll also need to tell them one of the following for the deceased:

National Insurance number

Unique Taxpayer Reference (UTR) - you can find this on letters or payslips from HMRC

full address

last employer or pension provider’s name and address

Filling in the Self Assessment tax return

The records you’ll need for the deceased’s tax return will depend on their circumstances. You’ll usually need details of the deceased’s bank and savings accounts, for example:

bank statements

building society pass books

dividend vouchers

National Savings bonds or certificates

If the deceased was employed or receiving a pension you’ll usually need:

work or pension payslips

details of any expenses paid by the employer

confirmation of any state pension

You’ll need their business records if the deceased ran their own business or rented out property.

Contact HMRC’s Bereavement helpline if you need help completing a return for someone who has died or if you cannot find their records.

Sending the return

Send the completed Self Assessment form by post.

The return must reach HMRC by the date given in the letter you received with the form.

You can hire a professional (such as an accountant) to help you submit a tax return on behalf of the deceased.

Telling HMRC about the ‘administration period’

If you’re the executor or administrator of an estate you may also need to send information to HMRC for the ‘administration period’. This is the time between the day after the death and the date the estate is settled (‘distributed’).

What you need to send depends on the size of the estate, and the money that came from it during the administration period.

When you must send a tax return for the ‘administration period’

Fill in a trust and estate tax return if any of the following apply:

the total Income Tax and Capital Gains Tax due for the administration period was more than £10,000

the estate was worth more than £2.5 million at the date of death

the date of death was before 6 April 2016 and more than £250,000 a year came from the sale of the estate’s assets by administrators or executors

the date of death was on or after 6 April 2016 and more than £500,000 a year came from the sale of the estate’s assets by administrators or executors

The trust and estate tax return is only for the estate - it’s separate from the return you sent on behalf of the deceased.

Sending the tax return

To send an estate tax return, you must first register the estate online.

You must register by 5 October after the tax year you’re sending a return for. For example, if you’re sending a return for the 2020 to 2021 tax year (6 April 2020 to 5 April 2021) then you must register by 5 October 2021.

To register the estate you’ll need:

a Government Gateway user ID - the account needs to be registered as an organisation (you cannot use an account registered to an individual)

a National Insurance number (a temporary reference number will not work)

You’ll need a new Government Gateway user ID for each estate you register

You must register the estate online. Then you’ll get a Unique Taxpayer Reference (UTR) in the post within 15 working days (21 if you’re abroad). You’ll need it to send a tax return.

Once you’ve received your UTR, you can either:

fill in paper form SA900 and post it to HMRC by 31 October after the tax year it applies to

buy software to send it electronically by 31 January after the tax year it applies to

After you’ve sent your return, HMRC will tell you how much the estate owes. You’ll need to pay the Self Assessment bill by the deadline.

If you do not need to send a tax return

You can make ‘informal arrangements’ instead. To do this, write to HMRC and tell them:

the Income Tax and Capital Gains Tax due for the administration period

the name, address, National Insurance number, and UTR of the deceased

your name and contact details

Send this information to HMRC’s address for PAYE and Self Assessment. You must not send tax payments with this information.

You’ll be provided with a payment slip and reference number. You must use these to pay any tax that needs to be paid.


Tax and Employee Share Schemes

Overview

If your employer offers you company shares, you could get tax advantages, like not paying Income Tax or National Insurance on their value.

Tax advantages only apply if the shares are offered through the following schemes:

Share Incentive Plans

Save As You Earn (SAYE)

Company Share Option Plans

Enterprise Management Incentives (EMIs)

You may be offered shares outside of these schemes. However these will not have the same tax advantages.

You can also get tax advantages if you’re an employee shareholder.

Share Incentive Plans (SIPs)

If you get shares through a Share Incentive Plan (SIP) and keep them in the plan for 5 years you will not pay Income Tax or National Insurance on their value.

You will not pay Capital Gains Tax on shares you sell if you keep them in the plan until you sell them.

If you take them out of the plan, keep them and then sell them later on, you might have to pay Capital Gains Tax if their value has increased.

There are 4 ways you can get shares under SIPs.

Free shares

Your employer can give you up to £3,600 of free shares in any tax year.

Partnership shares

You can buy shares out of your salary before tax deductions. There’s a limit to how much you can spend - either £1,800 or 10% of your income for the tax year, whichever is lower.

Matching shares

Your employer can give you up to 2 free matching shares for each partnership share you buy.

Dividend shares

You may be able to buy more shares with the dividends you get from free, partnership or matching shares (but only if your employer’s scheme allows it).

You will not pay Income Tax if you keep the dividend shares for at least 3 years.

You’ll have to pay Income Tax and National Insurance on any shares you take out of a SIP early.

Save As You Earn (SAYE)

This is a savings-related share scheme where you can buy shares with your savings for a fixed price.

You can save up to £500 a month under the scheme. At the end of your savings contract (3 or 5 years) you can use the savings to buy shares.

The tax advantages are:

the interest and any bonus at the end of the scheme is tax-free

you do not pay Income Tax or National Insurance on the difference between what you pay for the shares and what they’re worth

You might have to pay Capital Gains Tax if you sell the shares.

You’ll not pay Capital Gains Tax if you transfer the shares:

to an Individual Savings Account (ISA) within 90 days of the scheme ending

to a pension, directly from the scheme when it ends

If you do not transfer your shares to a pension immediately when the scheme ends, you can still transfer them up to 90 days later. You may have to pay Capital Gains Tax if they go up in value between when you buy them and when you transfer them.

Company Share Option Plan

This gives you the option to buy up to £30,000 worth of shares at a fixed price.

You will not pay Income Tax or National Insurance contributions on the difference between what you pay for the shares and what they’re actually worth.

You may have to pay Capital Gains Tax if you sell the shares.

Enterprise Management Incentives (EMIs)

If you work for a company with assets of £30 million or less, it may be able to offer Enterprise Management Incentives (EMIs).

Your company can grant you share options up to the value of £250,000 in a 3-year period.

You will not have to pay Income Tax or National Insurance if you buy the shares for at least the market value they had when you were granted the option.

If you were given a discount on the market value, you’ll have to pay Income Tax or National Insurance on the difference between what you pay and what the shares were worth.

Excluded activities

Companies that work in ‘excluded activities’ are not allowed to offer EMIs. Excluded activities include:

banking

farming

property development

provision of legal services

ship building

Employee shareholder shares

To be an employee shareholder, you must own shares in your employer’s company that were worth at least £2,000 when you got them.

You will not usually pay Income Tax or National Insurance on the first £2,000 worth of employee shareholder shares you get before 1 December 2016.

You will not get tax relief if you or someone you’re connected with (like a business partner, spouse or family member) have 25% or more voting rights in the company.

When you become an employee shareholder your employer must pay for an independent expert to give advice about the terms and effects of the employee shareholder agreement. This advice not count as a taxable benefit.

Selling your shares

You might not pay Capital Gains Tax when you sell shares. It depends on when you signed your employee shareholder agreement.

Before 17 March 2016

You only pay Capital Gains Tax on shares that were worth over £50,000 when you got them.

From 17 March 2016

You only pay Capital Gains Tax on gains over £100,000 that you make during your lifetime. The ‘gain’ is the profit you make when you sell shares that have increased in value.

Transferring your shares to an ISA

You can transfer up to £20,000 of employee shares into a stocks and shares Individual Savings Account (ISA) if you have shares in a:

Save As You Earn (SAYE) scheme

Share Incentive Plan (SIP)

Your ISA provider must agree to the transfer.

You will not have to pay Capital Gains Tax on any gains you make on your shares if you move them to an ISA.

You must transfer your shares to your ISA within 90 days of when you took out your SIP or SAYE shares.

These shares will count towards your £20,000 ISA limit. They cannot be in addition to the limit.

Ask your employer or ISA provider for more information on how to transfer.


Tax codes

Overview

Your tax code is used by your employer or pension provider to work out how much Income Tax to take from your pay or pension. HM Revenue and Customs (HMRC) will tell them which code to use.

This guide is also available in Welsh (Cymraeg).

Find your tax code

Use the check your Income Tax online service within your Personal Tax Account to find your tax code for the current year. You can also view your tax code for:

a previous tax year

the next tax year

You’ll be asked to sign in with Government Gateway or create an account if you do not already have one.

Once signed in, you can also see:

if your tax code has changed

how much tax you’re likely to pay

You can also find your tax code on your payslip or tax code letter from HMRC.

If you think your tax code is wrong

If you think your tax code is wrong, you can update your employment details using the check your Income Tax online service.

You can also tell HMRC about a change in income that may have affected your tax code.

Why your tax code might change

HMRC may update your tax code if:

you start to get income from an additional job or pension

your employer tells HMRC you have started or stopped getting benefits from your job

you get taxable state benefits

you claim Marriage Allowance

you claim expenses that you get tax relief on

You may also be put on an emergency tax code if you change jobs.

What your tax code means

Your tax code is made up of several numbers and a letter.

1257L is the tax code currently used for most people who have one job or pension.

HMRC will usually contact you to explain how they worked out your individual tax code if your tax code changes.

What the numbers mean

The numbers in your tax code tell your employer or pension provider how much tax-free income you get in that tax year.

HMRC works out your individual number based on your tax-free Personal Allowance and income you have not paid tax on (such as untaxed interest or part-time earnings). They also consider the value of any benefits from your job (such as a company car).

What the letters mean

Letters in your tax code refer to your situation and how it affects your Personal Allowance.

Letters | What they mean

L | You’re entitled to the standard tax-free Personal Allowance

M | Marriage Allowance: you’ve received a transfer of 10% of your partner’s Personal Allowance

N | Marriage Allowance: you’ve transferred 10% of your Personal Allowance to your partner

T | Your tax code includes other calculations to work out your Personal Allowance

0T | Your Personal Allowance has been used up, or you’ve started a new job and your employer does not have the details they need to give you a tax code

BR | All your income from this job or pension is taxed at the basic rate (usually used if you’ve got more than one job or pension)

D0 | All your income from this job or pension is taxed at the higher rate (usually used if you’ve got more than one job or pension)

D1 | All your income from this job or pension is taxed at the additional rate (usually used if you’ve got more than one job or pension)

NT | You’re not paying any tax on this income

S | Your income or pension is taxed using the rates in Scotland

S0T | Your Personal Allowance (Scotland) has been used up, or you’ve started a new job and your employer does not have the details they need to give you a tax code

SBR | All your income from this job or pension is taxed at the basic rate in Scotland (usually used if you’ve got more than one job or pension)

SD0 | All your income from this job or pension is taxed at the intermediate rate in Scotland (usually used if you’ve got more than one job or pension)

SD1 | All your income from this job or pension is taxed at the higher rate in Scotland (usually used if you’ve got more than one job or pension)

SD2 | All your income from this job or pension is taxed at the top rate in Scotland (usually used if you’ve got more than one job or pension)

C | Your income or pension is taxed using the rates in Wales

C0T | Your Personal Allowance (Wales) has been used up, or you’ve started a new job and your employer does not have the details they need to give you a tax code

CBR | All your income from this job or pension is taxed at the basic rate in Wales (usually used if you’ve got more than one job or pension)

CD0 | All your income from this job or pension is taxed at the higher rate in Wales  (usually used if you’ve got more than one job or pension)

CD1 | All your income from this job or pension is taxed at the additional rate in Wales  (usually used if you’ve got more than one job or pension)

If your tax code has ‘W1’ or ‘M1’ or ‘X’ at the end

These are emergency tax codes.

If your tax code has a ‘K’ at the beginning

Tax codes with ‘K’ at the beginning mean you have income that is not being taxed another way and it’s worth more than your tax-free allowance.

For most people, this happens when you’re:

paying tax you owe from a previous year through your wages or pension

getting benefits you need to pay tax on - these can be state benefits or company benefits

Your employer or pension provider takes the tax due on the income that has not been taxed from your wages or pension - even if another organisation is paying the untaxed income to you.

Employers and pension providers cannot take more than half your pre-tax wages or pension when using a K tax code.

Emergency tax codes

If you’re on an emergency tax code your payslip will show:

1257 W1

1257 M1

1257 X

These mean you’ll pay tax on all your income above the basic Personal Allowance.

You may be put on an emergency tax code if HMRC does not get your income details in time after a change in circumstances such as:

a new job

getting company benefits or the State Pension

Emergency tax codes are temporary. HMRC will usually update your tax code when you or your employer give them your correct details. If your change in circumstances means you have not paid the right amount of tax, you’ll stay on the emergency tax code until you’ve paid the correct tax for the year.

Updating your details

Your employer can help you update your tax code by sending details about your previous income or pension to HMRC.

If you’ve started a new job

Give your employer your P45 from your previous job. If you do not have a P45, your employer should ask you for the information they need instead.

If you’ve started working for an employer after being self-employed

Your employer should give you a ‘starter checklist’ - this is a form you can use to give them details about your previous employment.

If you’ve started getting company benefits or the State Pension

Check your tax code online to make sure it includes the State Pension or company benefit. If they’re not included, update your details in the tax code online service or by contacting HMRC.

The emergency tax code will stay in place until the end of the tax year. This means you’ll pay the right amount of tax for the current tax year. In the new tax year HMRC will put you on a regular tax code.

Tell HMRC about a change in income

In most cases, HMRC will automatically update your tax code when your income changes, for example if you start a new job, start getting a pension or receive benefits or work expenses. They’ll usually get this information from your employer.

If HMRC has the wrong information about your income, you may be given an incorrect tax code.

To correct your tax code, make sure HMRC has up-to-date details about your income.

Check what you need to do if you’re on an emergency tax code.

Tell HMRC about a change

You can report a change in your income by either:

using the online check your Income Tax service

contacting HMRC

If you’re contacting HMRC on someone else’s behalf

If you need to tell HMRC about a change in someone else’s income (for example, because you’re their accountant) fill in a PAYE Coding Notice query form.

After you report your change

HMRC will contact you if they change your tax code.
They will also tell your employer or pension provider that your tax code has changed.

Your next payslip should show:

your new tax code

adjustments to your pay if you were paying the wrong amount of tax

Get a tax refund or pay the tax you owe

If HMRC update your tax code and you’ve paid too much or too little tax, HMRC will send you a P800 or a Simple Assessment tax calculation. This will enable you to get a refund or pay what you owe.


Tax on company benefits

Overview

As an employee, you pay tax on company benefits like cars, accommodation and loans.

Your employer takes the tax you owe from your wages through Pay As You Earn (PAYE).

The amount you pay depends on what kind of benefits you get and their value, which your employer works out.

Check your Income Tax to see how company benefits affect the tax you pay.

Some company benefits can be tax-free, like childcare and canteen meals.

You have to pay tax and National Insurance on things that are paid in cash, as they’re treated as earnings.

Tax on company cars

You’ll pay tax if you or your family use a company car privately, including for commuting.

You pay tax on the value to you of the company car, which depends on things like how much it would cost to buy and the type of fuel it uses.

This value of the car is reduced if:

you have it part-time

you pay something towards its cost

it has low CO2 emissions

If your employer pays for fuel you use for personal journeys, you’ll pay tax on this separately.

If you drive a hybrid

If your company car has CO2 emissions of 1 to 50g/km, the value of the car is based on its zero emission mileage figure, or ‘electric range’. This is the distance the car can go on electric power before its batteries need recharging.

Contact your employer to find out your car’s zero emission mileage figure.

Check or update your company car tax

Tell HM Revenue and Customs (HMRC) if your car or fuel details change. You can check or update your company car tax online, for example if:

you get a company car or give one back

your employer starts or stops paying for fuel for you to use personally

If a change affects the value of the car, HMRC will update your tax code so you pay the right tax.

Estimating the tax you’ll pay

You can see how much tax you might pay with HMRC’s company car and fuel benefit calculator.

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Other company benefits you'll pay tax on

You pay tax on the value of the benefit to you, which your employer works out.

Medical insurance

You usually pay tax on the cost of the insurance premiums if your employer pays for your medical insurance.

Check how your employer works out how much tax to deduct from your pay.

You can get some tax-free health benefits from your employer, including:

medical insurance when you’re working abroad

annual check-ups

Check and report changes to medical insurance paid for by your employer.

Loans

You’ll pay tax on low-interest or interest-free loans from your employer if they’re worth more than £10,000.

You pay tax on the difference between the interest rate you pay to your employer and the official rate of interest set by the Bank of England.

You may pay tax if your employer lends money to one of your relatives.

Living accommodation

If you (or one of your relatives) is living in accommodation provided by your employer you may pay tax.

How the tax is worked out depends on whether the accommodation cost more than £75,000.

You may not pay tax if you get the accommodation so you can do your job, or do your job better, for example agricultural workers living on farms.

Help with your Self Assessment

Use the living accommodation helpsheet if you need help with the ‘Employment’ section of your Self Assessment tax return.

Tax-free company benefits

You can get some company benefits tax free, including:

meals in a staff canteen

hot drinks and water at work

a mobile phone

workplace parking

Christmas parties can also be tax free if they cost £150 or less per head and are open to all employees.

Your employer might provide tax free childcare support, including childcare vouchers.

National Insurance on company benefits

You do not usually have to pay National Insurance on benefits you get from your job.

Your employer will pay National Insurance contributions on them instead.

But you do have to pay National Insurance on things that are paid in cash, as they’re treated as earnings.

For example, if your employer gives you a gift that you could sell instead of keep, you will pay National Insurance on the value of the gift.

Keeping records and reporting changes

At the end of each tax year, your employer will give you details of the company benefits they’ve told HM Revenue and Customs (HMRC) about.

They might give you a copy of your P11D form, if they sent one to HMRC.

You must keep these details for 2 years after the tax year they relate to.

Tell HMRC about starting or stopping company benefits

You must tell HMRC about any benefits you or your family start or stop getting from work - even if your employer has already taken Income Tax and National Insurance for them.

You should only tell HMRC that you’ve got a company car once you’ve started using it.


Tax on foreign income

Overview

You may need to pay UK Income Tax on your foreign income, such as:

wages if you work abroad

foreign investment income, for example dividends and savings interest

rental income on overseas property

income from pensions held overseas

Foreign income is anything from outside England, Scotland, Wales and Northern Ireland. The Channel Islands and the Isle of Man are classed as foreign.

Working out if you need to pay

Whether you need to pay depends on if you’re classed as ‘resident’ in the UK for tax.

If you’re not UK resident, you will not have to pay UK tax on your foreign income.

If you’re UK resident, you’ll normally pay tax on your foreign income. But you may not have to if your permanent home (‘domicile’) is abroad.

Reporting foreign income

If you need to pay tax, you usually report your foreign income in a Self Assessment tax return. But there’s some foreign income that’s taxed differently.

If your income is taxed in more than one country

You may be able to claim tax relief if you’re taxed in more than one country.

If you’ve not yet paid tax on the foreign income, you may need to apply for a certificate of residence to prove you’re eligible for relief.

UK residence and tax

Your UK residence status affects whether you need to pay tax in the UK on your foreign income.

Non-residents only pay tax on their UK income - they 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. But there are special rules for UK residents whose permanent home (‘domicile’) is abroad.

Work out your residence status

Whether you’re UK resident usually depends on how many days you spend in the UK in the tax year (6 April to 5 April the following year).

You’re automatically resident if either:

you spent 183 or more days in the UK in the tax year

your only home was in the UK - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year

You’re automatically non-resident if either:

you spent fewer than 16 days in the UK (or 46 days if you have not been classed as UK resident for the 3 previous tax years)

you work abroad full-time (averaging at least 35 hours a week) and spent fewer than 91 days in the UK, of which no more than 30 were spent working

Get help

If your situation’s more complicated or you need to confirm your status, you can:

read HMRC’s guidance on the Statutory Residence Test

get professional tax help

Your residence status when you move

When you move in or out of the UK, the tax year is usually split into 2 - a non-resident part and a resident part. This means you only pay UK tax on foreign income based on the time you were living here.

This is called ‘split-year treatment’.

You will not get split-year treatment if you live abroad for less than a full tax year before returning to the UK. You also need to meet other conditions.

To find out if you qualify and see which split-year treatment ‘case’ you’ll need to mention on your Self Assessment tax return, you can:

read chapter 5 of HMRC’s guidance note on the Statutory Residence Test

contact HMRC

If your situation changes

Your status can change from one tax year to the next. Check your status if your situation changes, for example:

you spend more or less time in the UK

you buy or sell a home in the UK

you change your job

your family moves in or out of the UK, or you get married, separate or have children

Residence and capital gains

You work out your residence status for capital gains (for example, when you sell shares or a second home) the same way as you do for income.

UK residents have to pay tax on their UK and foreign gains. Non-residents have to pay tax on income, but only pay Capital Gains Tax either:

on UK property or land

if they return to the UK

Residence before April 2013

There were different rules for working out your residence status before 6 April 2013.

'Non-domiciled' residents

UK residents who have their permanent home (‘domicile’) outside the UK may not have to pay UK tax on foreign income.

The same rules apply if you make any foreign capital gains, for example you sell shares or a second home.

Working out your domicile

Your domicile’s usually the country your father considered his permanent home when you were born. It may have changed if you moved abroad and you do not intend to return.

If you need help working out which country you’re domiciled in, you can:

read chapter 5 of HM Revenue and Customs’ (HMRC) guidance on ‘Residence, Domicile and the Remittance
Basis’

get professional tax help, for example from a tax adviser

There are additional rules for domicile and Inheritance Tax.

Tax if you’re non-domiciled

You do not pay UK tax on your foreign income or gains if both the following apply:

they’re less than £2,000 in the tax year

you do not bring them into the UK, for example by transferring them to a UK bank account

If this applies to you, you do not need to do anything.

Chapter 9 in HMRC’s guidance on ‘Residence, Domicile and the Remittance
Basis’ explains the rules for bringing income or gains to the UK.

If your income is £2,000 or more

You must report foreign income or gains of £2,000 or more, or any money that you bring to the UK, in a Self Assessment tax return.

You can either:

pay UK tax on them - you may be able to claim it back

claim the ‘remittance basis’

Claiming the remittance basis means you only pay UK tax on the income or gains you bring to the UK, but you:

lose tax-free allowances for Income Tax and Capital Gains Tax (some ‘dual residents’ may keep them)

pay an annual charge if you’ve been resident of the UK for a certain amount of time

You pay an annual charge of either:

£30,000 if you’ve been here for at least 7 of the previous 9 tax years

£60,000 for at least 12 of the previous 14 tax years

Claiming the remittance basis is complicated. You can:

contact HMRC

If you work in the UK and abroad

There are special rules if you work both in the UK and abroad.

You do not have to pay tax on foreign income or gains (even those you bring into the UK) if you get the ‘foreign workers’ exemption’.

You qualify if:

your income from your overseas job is less than £10,000

your other foreign income (such as bank interest) is less than £100

all your foreign income has been subject to foreign tax (even if you did not have to pay, for example because of a tax-free allowance)

your combined UK and foreign income is within the band for basic rate Income Tax

you do not need to fill in a tax return for any other reason

If you qualify, you do not need to do anything to claim.

If you’re seconded to the UK

You may be able to claim Overseas Workday Relief if your employer sends you to work in the UK on secondment.

If you qualify you:

pay UK tax on UK employment income based on the number of days you’ve worked here

do not pay tax on income from days you work abroad (as long as you do not bring it into the UK)

Ask your employer to find out if you can claim.

Foreign students

There are special rules if you come to study in the UK.

Reporting your foreign income

You usually need to fill in a Self Assessment tax return if you’re a UK resident with foreign income or capital gains. But there’s some foreign income that’s taxed differently.

You do not need to fill in a tax return if all the following apply:

your only foreign income is dividends

your total dividends - including UK dividends - are less than the £2,000 dividend allowance

you have no other income to report

Different rules may apply if your permanent home (‘domicile’) is abroad.

Register for Self Assessment

If you do not usually send a tax return, you need to register by 5 October following the tax year you had the income.

You’ll get a letter telling you what to do next after you’ve registered.

Register now

Filling in your tax return

Use the ‘foreign’ section of the tax return to record your overseas income or gains.

Include income that’s already been taxed abroad to get Foreign Tax Credit Relief, if you’re eligible.

HMRC has guidance on how to report your foreign income or gains in your tax return in ‘Foreign notes’.

Foreign income that's taxed differently

Most foreign income is taxed in the same way as UK income, but there are special rules for:

pensions

rent from property

certain types of employment income

Pensions

You have to pay tax on pensions if you’re resident, or were resident in any of the 5 previous tax years.

You also pay tax on any foreign pension payments, including unauthorised payments like early payments and some lump sums.

Check with your pension provider to find out how you’ll be taxed.

Rent from property

You pay tax in the normal way on overseas property. But if you rent out more than one, you can offset losses against other overseas properties.

Certain types of employment income

You usually pay tax in the normal way if you work both in the UK and abroad. There are special rules if you work:

on a ship or in the offshore gas or oil industry

for the EU or government, or as a volunteer development worker

If you're taxed twice

You may be taxed on your foreign income by the UK and by the country where your income is from.

You can usually claim tax relief to get some or all of this tax back. How you claim depends on whether your foreign income has already been taxed.

There’s a different way to claim relief if you’re a non-resident with UK income.

Apply for tax relief before you get taxed on foreign income

You have to apply for tax relief in the country your income’s from if:

the income is exempt from foreign tax but is taxed in the UK (for example, most pensions)

required by that country’s double-taxation agreement

Ask the foreign tax authority for a form, or apply by letter if they do not have one.

Before you apply, you must prove you’re eligible for tax relief by either:

completing the form and sending it to HMRC - they’ll confirm whether you’re resident and send the form back to you

including a UK certificate of residence, if you’re applying by letter

Once you’ve got proof, send the form or letter to the foreign tax authority.

If you’ve already paid tax on your foreign income

You can usually claim Foreign Tax Credit Relief when you report your overseas income in your tax return.

How much relief you get depends on the UK’s ‘double-taxation agreement’ with the country your income’s from.

You usually still get relief even if there is not an agreement, unless the foreign tax does not correspond to UK Income Tax or Capital Gains Tax.

Contact HM Revenue and Customs  (HMRC) or a get professional tax help if you’re not sure, or need help with double-taxation relief.

What you’ll get back

You may not get back the full amount of foreign tax you paid. You get back less if either:

a smaller amount is set by the country’s double-taxation agreement

the income would have been taxed at a lower rate in the UK

HMRC has guidance on how Foreign Tax Credit Relief is calculated, including the special rules for interest and dividends in ‘Foreign notes’.

You cannot claim this relief if the UK’s double-taxation agreement requires you to claim tax back from the country your income was from.

Capital Gains Tax

You’ll usually pay tax in the country where you’re resident and be exempt from tax in the country where you make the capital gain. You will not usually need to make a claim.

You have to pay Capital Gains Tax on UK residential property even if you’re not UK resident.

When to claim relief

There are different rules if your gain comes from an asset that either:

cannot be taken out of the country, such as land or a house

you’re using for business in that country

You’ll need to pay tax in both countries and get relief from the UK.

Dual residents

You can be resident in both the UK and another country. You’ll need to check the other country’s residence rules and when the tax year starts and ends.

HMRC has guidance for claiming double-taxation relief if you’re dual resident.

If you come to study in the UK

Foreign students usually do not pay UK tax on foreign income or gains, as long as they’re used for course fees or living costs like:

food

rent

bills

study materials

Check that the country your income’s from has a ‘double-taxation agreement’ that covers students.

HM Revenue and Customs (HMRC) may ask you to account for your living costs if they’re more than £15,000 in a tax year (excluding course fees). The tax year is from 6 April to 5 April the following year.

When you need to pay tax

You may need to pay tax on your foreign income in the normal way if you:

are from a country without a double-taxation agreement for students

have other income that you do not bring to the UK

bring it to the UK and spend it on things other than living costs and course fees

plan to stay in the UK as your permanent home (‘domicile’)

If you work in the UK

Some double-taxation agreements mean you do not pay UK tax on your income if you work while you’re a student.

If your country does not have an agreement like this, you have to pay tax in the same way as others who come to live in the UK.