Taxation of Ukrainians in Britain

To determine whether a Ukrainian is a tax resident of the United Kingdom, the classic test is used:

• a Ukrainian is considered a tax resident of the United Kingdom if he spent 183 or more days in the United Kingdom in a tax year.

But the fact that you have not lived in the UK for 183 days does not mean that you cannot be a tax resident. A Ukrainian may be considered a tax resident of the United Kingdom if he has strong personal and economic ties to the United Kingdom.

At the same time, such factors as:

• having family and friends in the United Kingdom;
• having real estate or a business in the United Kingdom;
• sources of income in the United Kingdom.

If a Ukrainian is a tax resident of the United Kingdom, he is required to pay personal income tax (PIT), regardless of where it is earned, and national insurance contributions (NICs).

Income subject to UK tax includes:

• salary;
• dividends;
• percentages;
• royalties;
• income from business activities;
• income from real estate;
• other types of income.

Tax rates in the United Kingdom depend on the amount of income.

For individuals, the income tax rates in 2023-2024 are as follows:

• 5% ​​- for incomes between 0 and 12,571 pounds sterling;
• 20% – for incomes between £12,571 and £50,270;
• 40% – for incomes between £50,271 and £150,000;
• 45% for incomes above £150,000.

The amount of NICs also depends on income level, but the base rate is 13.25%.

In addition to income taxes, Ukrainians in Britain may also be required to pay other taxes, such as:

• real estate tax;
• inheritance tax;
• gift tax.

Importantly: the Convention on the Avoidance of Double Taxation and the Prevention of Tax Evasion about taxes on income and the increase in the value of property is in force between Ukraine and Great Britain.

By this Convention, Ukrainians who are tax residents of Ukraine can receive a tax credit in the United Kingdom for the amount of taxes paid in Ukraine. To receive such a loan, it is necessary to submit a tax return in the United Kingdom.

Peculiarities of taxation of Ukrainians in Great Britain in 2023

There are some tax benefits for Ukrainians who arrived in the UK after 24 February 2022 due to the war in Ukraine.

Thus, Ukrainians who have a visa under the “Housing for Ukraine” program are exempt from paying taxes on salary income received during the first 12 months of their stay in Great Britain.

This exemption applies to all types of wages, including wages received from a UK employer, self-employed or freelance.

At the end of the first year of stay, Ukrainians participating in this program pay income tax without any benefits.

Other benefits

Ukrainians who arrived in the UK after 24 February 2022 may also be exempt from paying other taxes, such as property tax, inheritance tax, and gift tax.

Remember: these benefits apply to Ukrainians arriving in Great Britain after February 24, 2022!

Submission of applications for tax benefits

To receive tax benefits, it is necessary to submit an appropriate application to the UK Revenue Service (HMRC).

Claims for exemption from tax on salary income are submitted to HMRC by the end of the tax year in which the exemption was obtained.

Applications for tax credits for the amount of taxes paid in Ukraine are submitted to HMRC by the end of the tax year in which the taxes were paid in Ukraine.

To correctly determine tax obligations, Ukrainians who have moved to Britain are advised to contact a relevant specialist and receive qualified assistance.