Opening a Bank Account & Managing Your Taxes in the UK

Jump right in:

• Can a foreigner open a bank account in the UK?
• Top banks in the UK
• Overview of the tax system in the UK
• Income tax in the UK
• Do I need to file a tax return in the UK?
• Am I a resident for tax purposes?
• National insurance contributions in the UK
• Taxes for self-employed people in the UK

Until not long ago, opening a bank account in the United Kingdom required multiple forms of identification, utility bills, and proof of address. The process was particularly difficult for people who were in the process of relocating or still living abroad.

Nowadays, opening a bank account is much simpler. Online accounts and service providers with multi-currency accounts can often even do without a physical address in the country or only require a UK address to send your bankcard to (this can be a friend or relative’s house and does not have to be in the form of a tenancy agreement, utility bill, etc.).

You’ll still need a valid form of ID (e.g., your passport) and join a video call for verification, of course.

So-called High Street banks have a strong reputation and branches all over the country, making access to your accounts or customer service as simple as walking down the road:

• HSBC
• Lloyds
• RBS (Royal Bank of Scotland)
• Barclays
• Santander
• NatWest
• Nationwide

As the banking world increasingly shifts to the internet, you have your pick of online-only banks in the UK, including:

• Monzo
• Wise
• Starling
• Revolut
• Monese
• Chase

International banks in the UK can make the process of setting up a bank account as a non-resident easier. Well-known international banks with a presence in the UK include:

• Bank of America
• American Express
• Bank of China
• State Bank of India
• ABC International Bank

However, they generally come with higher fees or require minimum deposits.

Another interesting option are online money transfer services with multi-currency accounts, such as Wise. This type of service supports numerous currency routes with some of the lowest fees on the market, making moving money between home and the UK a breeze.

Firstly, a word of caution: taxes in the UK are a complex topic that becomes even trickier when you take the aspect of residence for tax purposes into account. So, while this guide can serve as a brief introduction, it does not replace the professional advice of a tax consultant.

In the UK, taxes are managed through Her Majesty’s Revenue and Customs (HMRC). Your personal tax year runs from 6 April to 5 April, while the accounting period of a company can be the calendar year, the financial year running from 1 April to 31 March, or any given 12-month period.

What types of taxes exist in the UK?

There are seven main types of taxes in the UK:

• Income tax on income from (self-)employment, interests and dividends, and other personal forms of income
• Corporation tax on company profit
• National insurance contributions: tax on earnings paid by employees and employers, which helps to build your entitlement to certain state benefits, such as state pension, healthcare, and maternity allowance
• Consumption tax: 20% VAT
• Excise duties on alcohol and tobacco
• Stamp duty on buying houses/shares
• Capital gains tax when selling property (that’s not your main home), valuable possessions (worth over 6,000 GBP), business assets, and the like

If you live, work, or study in the UK, you’ll have to pay income tax.

Tax will be due on your salary/wages and job benefits, self-employment profits, rental income, interests and dividends, as well as income from trusts, most pensions, and some state benefits.

For salaries and pensions, your income tax is typically automatically deducted directly with the Pay As You Earn (PAYE) system.

When calculating your taxes, you get a personal allowance of tax-free income. As of 2026, the following annual income tax bands and rates apply:

As so often, the devil’s in the detail, though: exceptions like a 1,000 GBP trading allowance, the Rent a Room Scheme, married couple allowances, general tax reliefs, and more can reduce the amount of tax you’ll have to pay.

On the other hand, if you’re a high earner with a taxable income of over 125,140 GBP, you’re not eligible for personal allowance in the first place.

Income tax band and rates also differ if you’re living in Scotland.

So for a full overview, best consult the official resources on income tax as provided by the British government.

The short answer: it depends.

Some of the most common cases in which a so-called Self-Assessment becomes necessary include:

• self-employment
• business partnership
• Capital Gains Tax payments on sales
• income from savings, investment, or property
• foreign income subject to taxes in the UK

You can use the governments’ online tool to figure out if you need to send a tax return for the previous tax year.

Your residence status for tax purposes also plays a role here.

If you’re physically present in the UK for 183 days or more within a tax year (i.e., between 6 April and 5 April of the following calendar year), you’ll automatically become a “tax resident” of the UK.

You’re also regarded as a tax resident when

• working full-time in the UK for at least 365 days without any major break
• the UK is your only home for a minimum of 91 days in a row — provided you’re at that home at least 30 days during the tax year
• you visit the UK regularly due to important ties; these ties can include family bonds, property ownership or a holiday home, business ownership, or other work-related duties

You can find out more about the Statutory Residence Test (SRT) on the HM Revenue & Customs website.

If you’re planning on working in the UK, you’ll need a National Insurance number.

This number is used by HMRC and your employer to establish how much to deduct from your income in the form of national insurance contributions. These contributions are then used, among other things, to finance state pensions.

Expats with a biometric residence permit (BRP) or eVisa might’ve already been issued one: check the back of your BRP or your eVisa details.

If that’s not the case, you can apply for your National Insurance number online, though you can only do so once you’re in the UK. The number can take up to 4 weeks to be issued.

National Insurance payments are due once you earn more than 242 GBP per week or 1,048 GBP per month (figures for the 2025-2026 tax year).

The National Insurance rate you then pay depends on your employment status and how much you earn. If you’re employed, your employer will deduct your National Insurance contributions through PAYE.

Class 1 contributions (the most common class for UK employees) amount to:

• 8% of your weekly earnings between 242 GBP and 967 GBP
• 2% of your weekly earnings above that

When self-employed, you typically fall under class 4. As of 2025, your national insurance contributions then amount to:

• 6% of annual profit between 12,570 GBP and 50,270 GBP
• 2% of annual profits above that

If you plan to work as a self-employed person in the UK, there are a few things to consider. Register with National Insurance first to take care of your social security contributions. You also must register for Self Assessment as a sole trader with the HMRC if you earn more than 1,000 GBP in a tax year. (Limited companies have to register online for corporation tax instead.)

Taxable turnovers over 90,000 GBP in 12 months require you to register for VAT as well.

The amount of tax you’ll have to pay as a self-employed worker depends on how much money you made and the “allowable expenses” you have incurred.

Allowable expenses include for example the costs of goods that you sell, wages and salaries for any staff, rent and utility bills for your premises, postage, phone, and internet bills, costs for advertising, insurance premiums, fees for your accountant, and more.

The tax-free personal allowance and the tax bands are the same for self-employed and employed people, meaning that you can make up to 12,570 GBP a year before having to pay tax (figure for the 2025–26 tax year).