What are National Insurance and income tax?

Every worker in the UK has a National Insurance (NI) number, which you need in order to work legally. It is used to keep track of social security contributions. If you earn more than about £166 a week, both you and your employer have to pay what are called National Insurance contributions (NICs). These are a kind of tax. In return, workers gain entitlements to various social security benefits. Paying NICs in the UK can also help you build up entitlements in your home country.

To get a NI number, you need to make an appointment for an 'evidence of identity' interview at your nearest Job Centre. This is a government office that can be found in most large towns or city districts. You will need to take proof of your identity (such as a passport) as well as evidence that you are working. You may be given a temporary NI number until the proper number is issued.

If you are moving to the UK, you may already have a National Insurance number, which will be printed on the back of your biometric residence permit.

Visit the GOV.UK website for more information about National Insurance.

Beware of scam ‘official looking’ online companies who claim to be able to get you a national insurance number online and charge you money. Getting a national insurance number is free and straightforward. It is a process operated by the government. 

When you work in the UK, you will also have to pay income tax on anything you earn above your ‘personal allowance threshold’ (explained below). The amount of tax you have to pay depends on a number of different factors. Every worker in the UK has a tax code, which an employer uses to work out how much tax they should deduct from your wages and pay to the government on your behalf (known as Pay as you Earn, or PAYE). If you are starting your first job in the UK, you will probably start to pay 'emergency tax' until you have been given a tax code.

Every worker has a 'personal allowance' threshold. This is the amount of income each year you can earn before paying income tax. The standard personal allowance for the tax year from April 2019 to April 2020 is £2,500. The personal allowance is reviewed every year.

Some employers may offer you a job without paying National Insurance or tax (known as 'cash in hand'). This is against the law. If they are breaking this law, it is very likely they will break other employment laws as well, especially those that protect workers. It is likely to be harder for you to enforce any of your legal rights if you are not working legally. You should avoid this type of job.

Note that your employer has no right to hold on to your passport or identity documents, but they must ask to see original identity documents proving that you have the legal right to work in the UK before you are allowed to start work. They will take a photocopy of your identity documents.

If you are concerned about the conditions where you work, you can complain to the Gangmasters and Labour Abuse Authority. The GLAA provides forms in a variety of languages to help you report an issue where you work. There is also a confidential telephone hotline: 0800 432 0804.

There is also a Modern Slavery Helpline: 08000 121 700 with useful resources and sources of support.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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