UK residence rules and how much tax you pay

When it comes to paying tax in the UK, your residence status will affect how much tax you pay on foreign income.

HM Revenue & Customs (HMRC) has launched a new tool to define tax residence status and applies the rules as set out in the Statutory Residence Test (SRT) to help determine an individual’s residence status for tax purposes. 

From 6 April 2013 new statutory tests were introduced to determine whether individuals are resident in the UK or not. It can be complicated and there will still be situations where someone’s tax residence isn’t clear between spending substantial time overseas and also making visits to the UK.

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

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

You may be resident under the automatic UK tests if:

• You spent 183 or more days in the UK in the tax year
• Your only home was in the UK and it was available to use for at least 91 days in total – and You spent time there for at least 30 days in the tax year
• You worked full-time in the UK for any period of 365 days and at least one of these days fell into the specific tax year

You may also be resident under the sufficient ties test if you spent a number of days in the UK and you have additional links, like work or family.

You can use the residence status checker if you’re still unsure about your status. This will indicate whether you were a UK resident in any tax year from 6 April 2016.