Tax Residency Rules in the UK: A Complete Guide for Expats
Understanding your UK tax obligations is one of the most critical steps when planning a move. Your liability to pay tax to the UK government hinges almost entirely on one key concept: your tax residency status.
This guide will walk you through the essential tax residency rules, explaining why they matter and how you can determine your own status with confidence. We’ll also help employers understand how to manage taxes for their employees when expanding to the United Kingdom.
Overview of tax residency rules in the UK
Your tax residency status is the cornerstone of your UK tax position. It fundamentally dictates which parts of your global income you need to report and pay tax on in the UK.
If you are considered a UK tax resident, you will generally be liable for UK tax on your worldwide income. That includes money you earn from overseas investments, foreign properties, or employment outside the UK
However, if you are not a UK resident, you will only pay UK tax on income that is sourced within the UK, such as rent from a UK property or earnings from a UK-based job.
So, how does the UK government determine this? Since 2013, the UK has used a detailed framework known as the Statutory Residence Test (SRT). The SRT uses a combination of objective day-counts and an analysis of your connections to the UK to provide a clear answer on your status for each tax year, which runs from 6th April to 5th April the following year.
Criteria for how to determine tax residency
Understanding the Statutory Residence Test might seem complex, but by breaking it down, you can get a clear picture of your situation. The test uses a series of automatic tests—both for residency and non-residency—and a series of “sufficient ties” for more complex cases.
The automatic tests
The simplest way to be classified as a UK tax resident is to meet one of the automatic overseas tests:
- The 183-day rule: If you spend 183 or more days in the UK in any single tax year, you are automatically a UK tax resident for that year.
- The full-time work test: If you work full-time overseas over a period of 365 days, with no significant breaks, and you spend fewer than 91 days in the UK (with no more than 30 of those days spent working), you will typically be considered non-resident.
The sufficient ties test
If you do not meet any of the automatic tests, the SRT requires an analysis of your connections, or “ties,” to the UK. The more days you spend in the UK, the fewer ties are needed for you to be considered resident. These UK ties include:
- Family ties: A spouse, civil partner, or minor children who are UK residents.
- Accommodation ties: Having a place to live in the UK that is available for your use for at least 91 consecutive days.
- Work ties: Performing more than three hours of work per day in the UK.
- 90-day tie: Spending more than 90 days in the UK in either of the previous two tax years.
- Country ties: Spending more time in the UK than in any other single country during the tax year.
Practical scenarios for expats
Here are two examples to illustrate the tax residency tests in practice:
The short-term assignee: Maria, an Italian citizen, moves to the UK for an 18-month project. She rents a flat in London, and her family remains with her. She spends over 183 days in the UK in the tax year. She is automatically a UK tax resident and must report her worldwide income.
The frequent business traveller: John, an Australian executive, makes regular trips to the UK. In one tax year, he spends 100 days in the UK. He has no family or home in the UK, but his work ties are strong. An assessment of his ties would be needed, but his significant work presence likely makes him a UK tax resident.
Tax obligations for residents and non-residents
Your tax residency status directly shapes your financial responsibilities to HM Revenue & Customs (HMRC). The difference between being a resident and a non-resident is substantial.
Obligations for UK tax residents
If you are a UK tax resident, you are generally taxed on your worldwide income and gains. This means you must report and potentially pay UK tax on:
- Wages from UK and overseas employment.
- Profits from self-employment conducted anywhere in the world.
- Rental income from properties in the UK and abroad.
- Foreign investment income, such as dividends and interest from overseas accounts.
- Pensions from overseas.
Note that UK residents are entitled to a personal allowance (for the 2025 tax year, this is £12,570), which is the amount of income you can earn before you start paying tax.
Income tax rates for 2025 are progressive: 20% on income between £12,571 and £50,270, 40% on income between £50,271 and £125,140, and 45% on income above £125,140.
Obligations for non-UK residents
If you are not a UK tax resident, you are generally only taxed on income that arises in the UK. This typically includes:
- Wages for work physically performed in the UK.
- Rental income from UK properties.
- Profits from a UK-based business or trade.
Furthermore, non-residents may still be eligible for the UK personal allowance, depending on their nationality and the specific tax treaties in place.
Reporting and deadlines
For most individuals with more complex affairs, including almost all those with foreign income, the primary method for foreign income reporting is through a Self Assessment tax return. The key deadlines are:
- Register for self assessment: By 5th October, following the end of the tax year in which you had the income.
- File a paper tax return: By 31st October.
- File an online tax return and pay any tax due: By 31st January of the following year.
Special rules and incentives for expats
The UK system includes specific provisions that can significantly affect the tax bills of new arrivals and those with international income.
The end of the non-dom regime and the new 4-year FIG regime
For many years, the UK operated a “non-domiciled” (non-dom) regime that allowed some UK residents to pay tax on foreign income only if they brought it to the UK. This has been abolished as of 6th April 2025.
It has been replaced by a new, time-limited system: the 4-year foreign income and gains (FIG) regime. This new regime offers relief from UK tax on eligible foreign income and gains for a maximum of four years, provided you do not bring the money into the UK.
You are eligible for this regime if you are a UK tax resident and you have been non-resident for the previous 10 consecutive tax years. This makes it a valuable tool for new arrivals to the UK.
You must make a claim on your Self Assessment tax return. Also, it’s important to note that making a claim will cause you to lose your personal allowance and capital gains tax annual exemption amount for that year.
Overseas workday relief (OWR)
For qualifying new residents, earnings from work performed outside the UK may be eligible for tax relief under a separate scheme known as Overseas Workday Relief (OWR).
To benefit, you typically need to be a new resident, file on the remittance basis (for years up to 2024/25) or under the new FIG regime (from 2025/26). You’ll also need to keep meticulous records of your workdays inside and outside the UK.
Double taxation agreements
The UK has a network of Double Taxation Agreements (DTAs) with countries worldwide. These agreements are designed to prevent the same income from being taxed in two different countries.
If you have paid foreign tax on income that is also taxable in the UK, you can usually claim relief. That’s either as a credit against your UK tax bill (which directly reduces it) or by having the income exempted in one of the countries. Determining the exact relief requires checking the specific DTA between the UK and the country in question.
How to maintain compliance and plan ahead
Staying on the right side of the UK tax authority (HMRC) requires organisation and often, professional advice.
Keep meticulous records
The foundation of good tax filing requirements compliance is record-keeping. You should maintain detailed documentation for at least six years. Essential records include:
- Travel diaries: A log of the dates you entered and left the UK, with details of the purpose of any trips. Digital records and passport stamps are key evidence.
- Proof of income and gains: Bank statements, payslips, rental income statements, and documents relating to the sale of assets for capital gains calculations.
- Evidence of ties to other countries: Documents proving rental or property ownership, family connections, and voter registration in other countries.
Use an Employer of Record
The UK’s tax residency rules and the taxation of foreign income are complex areas. There is the potential for significant financial penalties for non-compliance. This can be up to 200% of the unpaid tax in cases of deliberate non-disclosure.
Fortunately, Employer of Record services offer practical support for companies whose employees want to relocate to the UK or work from the UK without the employer having a local presence.
An EOR helps companies stay compliant by:
- Acting as the legal employer on behalf of a company that has no UK entity.
- Ensuring the worker is registered correctly with HMRC when becoming a UK tax resident.
- Managing PAYE payroll, tax withholdings, National Insurance contributions, and reporting.
- Providing fully compliant UK employment contracts aligned with local labour laws
- Avoiding risks around permanent establishment, misclassification, and incorrect payroll setup.
- Allowing the employee to legally work from the UK while the original employer maintains flexibility.
Overall, an EOR is a safe way for companies to continue employing a worker who becomes a UK tax resident — without needing to establish a UK subsidiary or navigate complex compliance alone.
Plan for the long term
Your tax situation is not static. A move abroad, the sale of a foreign property, or an inheritance can all change your circumstances. Regular reviews of your tax position, especially when your life changes, are crucial.
If you are planning to leave the UK, be aware of the “temporary non-residence” rules. It can mean that gains realised after you leave are still taxed in the UK if you return within five years.
Managing UK tax residency compliance — especially for employees relocating abroad — can be complex for companies without a local legal entity. An Employer of Record (EOR) like Hightekers ensures all employment contracts, payroll, and tax withholding requirements (including PAYE and National Insurance) are handled in full compliance from day one. This allows companies to support international mobility without unnecessary administrative burden or legal risk.
Contact Hightekers today to ensure UK tax compliance
Frequently asked questions
How many days can I spend in the UK without becoming a tax resident?
There is no single number, but if you spend fewer than 16 days in the UK (or 46 days if you were not resident in the previous three years), you are automatically non-resident.
However, spending 183 days or more makes you automatically a resident. Days between these thresholds require an analysis of your UK ties.
What is the difference between residence and domicile?
Residence is a short-term status determined each tax year based on your physical presence and ties. In comparison, domicile is a common law concept referring to the country you consider your permanent home.
Do I need to report foreign income if I don’t bring it to the UK?
Yes. From 6th April 2025, the remittance basis is abolished. If you are a UK tax resident, you must generally report your worldwide income on your UK tax return, regardless of whether you bring it to the UK.
