UK Tax Alert | Definition of Tax Residency

The article focuses on the definition of a UK tax resident and discusses how to avoid tax issues due to misunderstanding tax regulations. It can be particularly puzzling for those who have just moved to the UK to understand when they need to start paying taxes. Here's a brief summary of the article:

If you are a tax resident, you are required to pay taxes. If you're not or have yet to become a tax resident, you're not required to pay taxes.

The definition of a tax resident in the UK is fairly complex, associated with four major tie conditions:

Condition 1: You have stayed in your own residence in the UK for at least one night, or in a relative's home for at least 16 nights.

Condition 2: You have stayed in the UK for a full 90 days in any tax year during the past two tax years.

Condition 3: In a tax year, you have worked in the UK for more than 40 days (Note: Each day with more than 3 hours of work is counted as one working day).

Condition 4: Your family members in the UK are tax residents.

The length of your stay in the UK will also affect whether you become a tax resident, for example:

If you stay less than 45 days, you will not become a tax resident.

If you stay between 46 to 90 days and meet all four tie conditions, you will become a tax resident.

If you stay between 91 to 120 days and meet three of the tie conditions, or stay between 121 to 182 days and meet two of the tie conditions, you will become a tax resident.

If you stay more than 183 days in a tax year, regardless of whether you meet the above tie conditions, you automatically become a tax resident.

Once you become a tax resident, you must register with the tax office and submit your personal income tax return to avoid being pursued by the tax office.

If you have any questions about the tax filing process, it is recommended to consult a professional licensed accountant. You can now start filing taxes for the 2022 to 2023 tax year. If you moved to the UK after April 6th, 2022, you can assess whether you qualify as a tax resident based on the above conditions and proceed with tax filing.