The UK tax system

The Government raises money to spend on public services such as education, health and social security by requiring people to pay taxes. When you come to live and work in the UK, the tax you pay will be determined by how long you're planning on staying and whether you're hoping to live here permanently.

Resident or non-resident in the UK?

The tax you'll pay depends on whether you're a UK resident or ordinarily resident in the UK.

You can find a detailed definition of your residence status on the HM Revenue and Customs (HMRC) website.

Types of tax in the UK

As soon as you start working in the UK, you will need to notify HMRC, usually through your employer. HMRC will then give you a tax number, which will be used to calculate the amount of tax to deduct from your pay. You can find information about understanding your tax code on the Directgov website.

People in the UK have to pay a number of different taxes on the money they earn. Key taxes include:

• Income tax - a tax on the money you earn 
• Stamp Duty - the tax you pay on property or shares
• Value Added Tax (VAT) - a tax on goods and services in the European Union
• National Insurance - which builds up entitlement to certain social security benefits like pensions and sick pay.

You can find out more about taxes in the UK on the Directgov website.

Managing your money

There are a number of useful financial products you can use to help you manage your money, including:

• Bank accounts, which help you to pay your bills, receive money - such as salary or benefits, and keep track of what you're spending your money on
• Savings, for times when you may need to access money quickly
• Insurance, a way of protecting yourself against unforeseen events
• Credit cards, a form of borrowing money from banks, building societies and some high street shops
• Investments, where you invest your money in assets that could either rise or fall in value
• Mortgages, a secured loan taken out when buying a home.

You can find out a range of useful information about managing your money in the UK on the Financial Services Authority (FSA) MONEYmadeclear website.