What is the tax rate for residents and non-residents in the UK?

The tax rate for residents and non-residents in the UK depends on the type and amount of income they earn. There are different types of taxes that apply to different types of income, such as income tax, corporation tax, capital gains tax, dividend tax, etc. You can find more information and guidance on the different types of taxes and how they are calculated on [GOV.UK].

Generally, the main tax that affects most individuals and businesses is income tax, which is a tax on the money you earn from employment, self-employment, pensions, savings, etc. The income tax rate for residents and non-residents in the UK is as follows:

•  If you are a resident in the UK, you will pay income tax on your worldwide income, including your foreign income. However, you may be able to claim a foreign tax credit or an exemption if you have already paid tax on your foreign income in your home country, depending on the tax treaty between the UK and your home country. The income tax rate for residents in the UK varies depending on your income level and personal allowance. The personal allowance is the amount of income you can earn before you start paying income tax. For the 2023/24 tax year, the personal allowance is £12,570. The income tax rates for residents in the UK for the 2023/24 tax year are:

•  Basic rate: 20% on income between £12,571 and £50,270

•  Higher rate: 40% on income between £50,271 and £150,000

•  Additional rate: 45% on income over £150,000

•  If you are a non-resident in the UK, you will only pay income tax on your UK income, such as your income from your UK business bank account. You will not pay UK tax on your foreign income, unless it is from a UK source, such as a UK property or a UK pension. The income tax rate for non-residents in the UK is the same as for residents, except that you do not get a personal allowance. However, you may be able to claim a personal allowance if you are a citizen of a European Economic Area (EEA) country or a country that has a double taxation agreement with the UK that allows it.