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Taxation (UK) · The scope of income tax

Income Tax Scope, Residence and Tax Year for TX-UK

Updated 11 October 2026 · Fact-checked

UK income tax is charged on individuals for a tax year running 6 April to 5 April. Residents are taxed on worldwide income, non-residents mainly on UK income. You decide residence with the statutory residence test: days in the UK, whether you were previously resident, and the number of UK ties. Then you split income into taxable and exempt.

Understand Income Tax Scope, Residence and Tax Year

Income tax is charged on individuals (and some trusts), not on companies. Companies pay corporation tax. Each person is assessed separately for a tax year, which runs from 6 April to 5 April. The year that starts on 6 April 2025 and ends on 5 April 2026 is called 2025/26. Income is taxed in the year it arises or, for trading profits, the year the basis of assessment allocates it to.

What you are taxed on depends on residence. A UK resident is generally taxed on their worldwide income. A non-resident is generally taxed only on UK-source income. So residence is the first question in any scope problem.

Residence is decided by the statutory residence test. Start with the number of days spent in the UK in the tax year. Very few days means automatically not resident. A very high number of days (183 or more) means automatically resident. In between, you count UK ties (such as family, accommodation, work and time spent in the UK) and compare them with the table ACCA provides. The result also depends on whether you were resident in the UK in one or more of the previous three tax years.

Not all receipts are taxable. Some income is exempt, meaning it is outside income tax altogether, for example interest on ISAs. Other income is taxable but may be reduced by reliefs. In the exam you must be able to say whether an item is taxable or exempt and, if taxable, which type of income it is.

Key rules to remember

Tax year
6 April to 5 April
The tax year 2025/26 runs from 6 April 2025 to 5 April 2026. Use the year in which the income falls.
Automatic non-residence (previously resident or not)
Days in UK < 16 → automatically not resident
Applies to everyone, whether or not previously resident.
Automatic residence
Days in UK ≥ 183 → automatically resident
Applies to everyone. No ties are needed.
Residence test: previously resident
16–45 days: 4 ties | 46–90: 3 ties | 91–120: 2 ties | 121–182: 1 tie
Resident if the number of UK ties is at least the number shown.
Residence test: not previously resident
16–45 days: automatically not resident | 46–90: 4 ties | 91–120: 3 ties | 121–182: 2 ties
Resident if the number of UK ties is at least the number shown. The table in the exam is provided, so learn how to read it.
Scope of charge
UK resident → worldwide income; non-resident → UK income
Check the source of each item of income before including it.

How to solve Income Tax Scope, Residence and Tax Year questions

Use this method for any question asking whether someone is liable to UK income tax or which income to include.

  1. 1Identify the tax year from the dates given. Remember it runs 6 April to 5 April.
  2. 2Count the days spent in the UK in that year.
  3. 3If the days are fewer than 16, conclude automatically not resident. If 183 or more, conclude automatically resident.
  4. 4For days in between, decide whether the person was previously resident, then count the UK ties and read the right column of the residence table.
  5. 5State the conclusion in one sentence: resident or not resident, with the reason.
  6. 6List each item of income. Mark it as exempt, or taxable.
  7. 7If resident, include worldwide income. If not resident, include only UK-source income.
  8. 8Show your reasoning briefly so you can earn marks even if one judgement differs.

Quickest way: Days first, then ties

When to use it: Use this for objective test questions on residence where time is short.

  1. Check the extremes first: under 16 days or 183 and over decides the answer at once.
  2. Otherwise note previously resident or not before looking at the table.
  3. Find the row for the days and compare the ties with the number needed.
  4. Remember that a person not previously resident with 16 to 45 days is automatically not resident.
  5. Read the question again to confirm which tax year and which person it asks about.

Common mistakes in Income Tax Scope, Residence and Tax Year

  • Using 1 January to 31 December or 1 April to 31 March as the tax year.

    Calendar and company financial years are more familiar.

    Fix: Write 6 April to 5 April next to the question before you start.

  • Using the wrong column of the residence table.

    Students forget to decide whether the person was previously resident.

    Fix: Decide previous residence first and underline the column you will read.

  • Counting ties when days are under 16 or 183 or more.

    Students apply the full test to every case.

    Fix: Check the automatic cases first. They need no ties.

  • Taxing a non-resident on overseas income.

    Students forget the scope depends on residence.

    Fix: State residence status first, then include only income that is within scope.

  • Treating exempt income as taxable income, such as ISA interest.

    Students see the word 'interest' and add it automatically.

    Fix: Ask of each receipt: is it exempt, and if not, which type of income is it?

Worked examples

Example 1

Anita was resident in the UK in the previous tax year. In 2025/26 she spent 100 days in the UK and has 2 UK ties. Is she UK resident for 2025/26?

Show the solution
  1. She was previously resident, so use the previously resident column.
  2. 100 days falls in the 91 to 120 days band.
  3. In that band a previously resident person is resident with 2 UK ties or more.
  4. She has exactly 2 ties, which meets the requirement.

Answer: Anita is UK resident for 2025/26, so her worldwide income is within the charge to UK income tax.

Example 2

Ben has never lived in the UK. In 2025/26 he spent 60 days in the UK and has 3 UK ties. Is he UK resident, and what income is taxable in the UK?

Show the solution
  1. He was not previously resident, so use that column.
  2. 60 days falls in the 46 to 90 days band.
  3. That band needs 4 ties or more for residence.
  4. He has 3 ties, so he is not resident.
  5. As a non-resident he is taxed only on UK-source income, not on his overseas income.

Answer: Ben is not UK resident for 2025/26. Only his UK income is within the charge to UK income tax.

Exam tips

  • Learn how to read the residence table rather than memorising every figure. It is provided in the exam.
  • Always write down the tax year dates in scenario questions.
  • In objective tests, test the automatic cases first. They often decide the answer.
  • In written answers, state the conclusion and the reason in one sentence each.
  • Keep scope separate from rates. Residence decides what is taxed, the bands decide how much.

Practice questions from The scope of income tax

Income Tax Scope, Residence and Tax Year in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Income Tax Scope, Residence and Tax Year: frequently asked questions

When does the UK tax year start and end?

It runs from 6 April to 5 April. For example, 2025/26 runs from 6 April 2025 to 5 April 2026.

Who pays UK income tax?

Individuals pay income tax. Residents are taxed on worldwide income and non-residents on UK income, subject to the rules. Companies pay corporation tax instead.

How do I decide UK residence in ACCA TX-UK?

Count the days in the UK in the tax year. Under 16 is automatically not resident and 183 or more is automatically resident. In between, compare UK ties with the table, using the right column for previously resident or not.

What is the difference between taxable and exempt income?

Exempt income is outside income tax altogether, for example ISA interest. Taxable income is included in the computation and taxed at the relevant rates after reliefs and allowances.