UK Income Tax
|Income Tax allowances|
|Personal Allowance for people born after 5 April 1948 (1)||Note 2||£11,000|
|Income limit for Personal Allowance||Note 3||£100,000|
- The UK tax year 2016-17 refers to the period from 6th April 2016 to 5th April 2017.
- The Personal Allowance is the maximum amount an individual can earn in the UK, in any individual tax year, before paying income tax.
- The Personal Allowance reduces where the income is above £100, 000 – by £1 for every £2 of income above the £100,000 limit. This reduction applies irrespective of age.
UK Income Tax rates and taxable bands
|Basic rate: 20%||£0-£32,000|
|Higher rate: 40%||£32,001- £150,000|
|Additional Rate: 45%||Over £150,000|
National Insurance Contributions, rates and bands
|£ per week||2016-17|
|Lower earnings limit, primary Class 1 (1)||£155|
|Upper earnings limit, primary Class 1 (2)||£827|
|Upper earnings limit, primary Class 1 (2)||12%|
|Upper earnings limit, primary Class 1 (2)||2%|
- The lower earnings limit is the weekly amount below which there will be no National Insurance liability. The National Insurance rate of 12% is only payable on amounts above £155 per week.
- The upper earnings limit is the level above which the rate of National Insurance falls to 2%.
If you find looking at tax tables too wearisome, calculators of net take home pay, tax and national insurance etc., and other useful calculators are provided on Clarity’s mobile app, available by clicking on the following links:
Teachers arriving in the UK from overseas
There are certain considerations which need to be taken into account by teachers coming to work in the UK from an overseas location.
It is important to consider the potential impact of home country taxation on earnings while working in the UK.
When you arrive in the UK, you will be entitled to a full tax year’s personal tax allowances in the UK (remember The UK Tax Year runs from 6th April in any year to 5th April in the following year).
Therefore, for a teacher working a full academic year (September to July), the UK tax situation will be quite favourable, as there will be two tax years’ allowances available to set-off against one year’s income.
However, in all cases our calculations do not, and cannot, take direct account of your potential tax situation in your home country, and if you have had earnings in your home country prior to arriving in the UK, or if you commence to earn in your home country after leaving the UK, then there could be home country tax implications on your earnings in the UK.
Rules regarding tax residence (which dictates where you pay tax) are quite complex and confusing, however most countries have agreements in place (Double Tax Agreements) which help to simplify cross border issues. Also the fact that most countries have tax years which coincide with the calendar year presents potential residence planning opportunities. Therefore, if you feel that there may be tax issues in your home country be it at the start or the end of your time in the UK, please contact us for personalised advice relevant to your own situation.
Compulsory social security deductions
Social security contributions (called National Insurance in the UK) are in effect a second tax on income, and are deducted at source from the employee’s salary.
However, residence rules as they apply to National Insurance are totally different from those that apply to Income Tax, and cross-border social security agreements take a totally different form from the Double Tax Agreements referred to above.
First of all, you will start to pay National Insurance at source on your salary immediately; there is no ‘annual allowance’ as such. However, by being employed in the UK and paying UK national insurance, you will earn the right to the universal benefits of the UK welfare state (automatic right to free health care, hospital treatment, unemployment benefit etc.).
A further part of the UK national insurance contribution funds old-age pensions in the UK, and for a UK national accumulates over their working life and helps determine the level of state pension upon retirement. Clearly this aspect of the National Insurance contribution is of less interest to the non-national who may be unlikely to live in the UK until retirement. Therefore, there are provisions in the cross-border agreements, where the insured party returns home, for that part of the contributions made in the UK which relate to pension provision to be refunded by the UK authorities to the home country equivalent. Again this is too wide an area to go into specific detail, therefore if you feel this affects you at the end of your work in the UK, pleasecontact us for specific advice.
Who is Clarity?
Clarity is a trading name of The Houston Partnership, Chartered Accountants, and is engaged by Uteach to provide all payroll management services associated with the employment of teachers on fixed-term contracts in schools throughout the UK.
Clarity only manages teachers placed by UTeach Limited, and has no dealings with any other recruitment organisation. This ensures complete focus on the needs of Uteach and its outsourced teachers.
Clarity is completely independent of Uteach Limited and is wholly owned by The Houston Partnership, Chartered Accountants, based in Glasgow, Scotland.
Why do Uteach use Clarity?
European Employment Regulations stretch to many thousands of pages of legislation, and there are many parts of the legislation which places specific emphasis on the employment of temporary / fixed term workers. It is important that Uteach ensures that it always keeps on the right side of the law and ensures that the rights of the teachers it represents are met.
UTeach’s business is sourcing and recruiting the best teachers to fill the vacancies which are presented to it. It has no specific department or staff dedicated to legal or fiscal compliance, and no in-house tax expertise related to the employment of foreign nationals in the UK.
Clarity is an independent company wholly owned by a firm of Chartered Accountants who have 15 years’ experience in managing payroll compliance both in the UK and overseas. Uteach believes that Clarity’s expertise will enable them to offer a fully compliant, high value return to its teachers.
All costs associated with the services of Clarity are borne by Uteach. There is no cost to the teacher of this external resource.