Moving to London requires careful planning around your UK tax status to avoid unexpected bills and ensure compliance with HMRC regulations.
Understanding your tax residency status is essential for determining how much UK tax you’ll need to pay on your worldwide income and gains.
This guide breaks down the key steps to establish your tax status in London, including residency tests, registration requirements, and important deadlines.
Determining Your UK Tax Residency Status
The Statutory Residence Test (SRT) is used by HMRC to determine if you’re UK tax resident.
- Automatic UK resident if you spend 183 days or more in the UK during a tax year
- UK resident if your only home is in the UK for at least 91 days
- Non-resident if you work full-time overseas with fewer than 91 days in the UK
Registering with HMRC
Register for Self Assessment within 6 months of moving to the UK if you’re self-employed or have additional income sources.
- Apply online at HMRC’s website
- Contact HMRC’s helpline: 0300 200 3300
- Seek assistance from a qualified tax advisor for complex situations
National Insurance Numbers
Apply for a National Insurance number through the official government website if you plan to work in the UK.
Double Taxation Agreements
Check if your home country has a double taxation agreement with the UK to avoid paying tax twice on the same income.
| Common Countries | Agreement Status |
|---|---|
| USA | Full agreement in place |
| EU Countries | Comprehensive agreements |
| Australia | Full agreement in place |
Tax Year Timeline
The UK tax year runs from April 6 to April 5 of the following year.
- Self Assessment deadline: January 31
- Payment on account dates: January 31 and July 31
- P60 forms issued by: May 31
Common Tax Relief Options
Explore available tax reliefs to minimize your UK tax liability legally.
- Personal allowance: £12,570 (2023/24)
- Pension contributions relief
- Professional subscriptions
- Working from home allowance
Getting Professional Help
Consider hiring a qualified tax advisor for complex situations.
- Find chartered accountants through ICAEW
- Locate tax advisors via CIOT
- Expected costs: £200-£500 for basic tax returns
Next Steps for Your London Move
Keep detailed records of your UK entry and exit dates for accurate tax residency calculation.
- Document all sources of income
- Maintain proof of overseas tax paid
- Set up a UK bank account
- Register with a local GP
Tax Planning Strategies
Develop a comprehensive tax strategy before relocating to London to maximize efficiency and compliance.
- Split your income between tax years when possible
- Consider timing of asset disposals
- Review pension arrangements
- Plan remittance of foreign income carefully
Banking and Financial Considerations
Setting up proper banking structures is crucial for tax reporting and management.
- Separate UK and foreign accounts
- Track foreign currency transactions
- Maintain clear records of remittances
- Consider offshore banking implications
Common Mistakes to Avoid
Be aware of frequent pitfalls that can lead to tax complications.
- Missing registration deadlines
- Incorrect residency calculations
- Failing to declare worldwide income
- Improper record-keeping
Securing Your Tax Future in London
Take proactive steps to ensure long-term tax compliance and efficiency in the UK.
- Schedule regular tax planning reviews
- Keep updated with tax law changes
- Maintain organized financial records
- Build a relationship with a trusted tax advisor
Remember that proper tax planning is an ongoing process that requires regular attention and updates as your circumstances change. Stay informed about UK tax regulations and seek professional advice when needed to ensure continued compliance with HMRC requirements.
FAQs
- How do I register for tax when moving to London?
You need to register with HMRC by completing a Self Assessment tax return if you’re self-employed, or through your employer who will set up PAYE if you’re employed. You’ll need your National Insurance number, which can be obtained by calling the National Insurance number application line. - What is the tax year in the UK?
The UK tax year runs from April 6th to April 5th of the following year, which is different from many other countries where the tax year follows the calendar year. - Am I considered a UK tax resident?
You’re automatically considered a UK tax resident if you spend 183 or more days in the UK in the tax year, or if your only home is in the UK and you spend at least 30 days there in the tax year. - What is the Statutory Residence Test (SRT)?
The SRT is a test used by HMRC to determine your tax residence status. It considers factors like time spent in the UK, ties to the UK (family, work, accommodation), and your residence status in previous years. - Do I need to pay council tax in London?
Yes, if you’re renting or own property in London, you must pay council tax. The amount varies depending on your borough and property band. Students and single occupants may be eligible for discounts. - What tax forms do I need to complete when leaving London?
You should complete form P85 ‘Leaving the UK – getting your tax right’ when you leave the UK. If you continue to receive UK income, you may need to continue filing Self Assessment returns. - How are foreign income and assets taxed in the UK?
UK tax residents are typically taxed on their worldwide income. However, if you’re non-domiciled, you may be able to claim the remittance basis, meaning you only pay UK tax on foreign income brought into the UK. - What are the current income tax rates in London?
For 2023/24, you pay 0% on income up to £12,570 (Personal Allowance), 20% on income between £12,571-£50,270 (Basic rate), 40% on £50,271-£125,140 (Higher rate), and 45% on income over £125,140 (Additional rate). - Do I need to inform HMRC if I start working in London?
Yes, your employer will typically handle this through PAYE, but if you’re self-employed or have additional income sources, you must register for Self Assessment within 6 months of the end of the tax year in which you started working. - What is National Insurance and do I need to pay it?
National Insurance is a tax that funds state benefits. If you’re employed and earn more than £242 per week (2023/24), you must pay National Insurance contributions. The rate and amount depend on your employment status and earnings.
