Official Statistics

Income Tax, National Insurance contributions, Tax Credits and Child Benefit Statistics for Non-UK Nationals: 2019 to 2020

Published 25 August 2022

1. About this release

This Official Statistics release provides figures for the Income Tax, National Insurance contributions (NICs), tax credits and Child Benefit paid by and to non-UK nationals in the 2019 to 2020 tax year.

Key statistics for the 2019 to 2020 tax year presented include:

• tax credits payments received by households with at least one non-UK national

• Income Tax, NICs, tax credits and Child Benefits paid by and to non-UK nationals, by country of nationality

• shares of total income (before and after tax) and Income Tax for non-UK nationals, by percentile groups

• the number of non-UK nationals liable to the higher rate and basic rate of Income Tax

1.1 Data sources

Survey of Personal Incomes, HM Revenue and Customs’ (HMRC’s) administrative tax credits and Child Benefit data, HMRC’s Migrant Worker Scan.

1.2 Coverage

Nationality is reported by individuals when they register for a National Insurance number through the adult National Insurance number registration process. If an individual has subsequently naturalised or changed nationality, this will not be reflected in these statistics.

This analysis does not include benefits administered by the Department of Work and Pensions (DWP) nor other taxes paid by individuals such as Value Added Tax (VAT) and business taxes.

1.3 What’s new in this publication?

The figures in this publication are Official Statistics, produced by analysts working within HMRC, in line with the values, principles and protocols set out in the Code of Practice for Official Statistics.

This statistical release was first published in August 2016 as Experimental Statistics. The publication has been developed and from August 2019 was extended to provide statistics for both European Economic Area (EEA) nationals and non-EEA nationals.

1.4 Key limitations of this analysis

This analysis is restricted to benefits administered by HMRC only, specifically tax credits and Child Benefit. This analysis does not include benefits administered by DWP.

This analysis refers to Income Tax and NICs linked directly to the individual’s National Insurance number. It does not include other taxes paid by individuals such as VAT and business taxes. This analysis excludes individuals paying tax using a Temporary Reference Number in place of a National Insurance number.

References to nationality are based on the nationality reported by individuals when they registered for a National Insurance number through the adult National Insurance number registration process, no matter how long ago this took place.

2. Main points

Figure 1: Income Tax and NICs paid by non-UK nationals and tax credits and Child Benefit payments received by non-UK nationals in the 2019 to 2020 tax year

Amount (£ billion)	EEA nationals	Non-EEA nationals
Income Tax	14.6	15.3
NICs	12.3	11.0
tax credits	1.5	2.5
Child Benefit	1.1	1.0

The key points to note from figure 1 are:

• EEA and Swiss nationals paid £24.4 billion more in Income Tax and NICs than they received in tax credits and Child Benefit payments. This is £2.0 billion higher than the previous year

• Non-EEA nationals paid £22.8 billion more in Income Tax and NICs than they received in tax credits and Child Benefit payments. This is £2.8 billion higher than the previous year

Figure 2: Income Tax and NICs paid by non-UK nationals and tax credits and Child Benefit payments received by non-UK nationals from the 2015 to 2016 tax year to the 2019 to 2020 tax year

The key points to note from Figure 2 are:

• in the four years following the 2015 to 2016 tax year, total payments to HMRC from Income Tax and NICs have increased year-on-year for both EEA and non-EEA nationals

• Child Benefit payments received by both EEA and non-EEA nationals have remained constant over this period

• tax credits payments received by EEA nationals have decreased from £1.9 billion to £1.5 billion between the 2018 to 2019 and 2019 to 2020 tax year

• tax credits payments received by non-EEA nationals have decreased from £3.0 billion to £2.5 billion between the 2018 to 2019 and 2019 to 2020 tax year

The rollout of Universal Credit to all areas of the country was completed on 12 December 2018 for new claims or for people having to make a new claim due to a change of circumstance. The rate of decline in the number of families in receipt of tax credits increased in the 2018 to 2019 tax year, largely due to the roll out of Universal Credit. From 1 January 2019, new claims for tax credits were closed except for a small number of cases.

3. Income Tax, class 1 and 4 NICs, tax credits and Child Benefit payments for non-UK nationals in the 2019 to 2020 tax year

Figure 3: Income Tax, class 1 and 4 NICs, tax credits and Child Benefit payments for EEA and Swiss nationals in the 2019 to 2020 tax year

The key points to note from figure 3 are:

• Polish nationals contributed the highest total amount of Income Tax and NICs out of all EEA and Swiss nationals at £3.6 billion, representing around 13% of the total contribution from all EEA and Swiss nationals

• although the Income Tax paid by French, Irish and Italian nationals was higher than that paid by Polish nationals, the NICs paid by nationals from each of these 3 countries was lower

• as in previous years, Polish nationals received the highest total amount of tax credits and Child Benefit payments of all EEA and Swiss nationals. The total tax credits payments received by Polish nationals was £669 million, representing around 26% of the total tax credits payments received by EEA and Swiss nationals

• restrictions to the freedom of movement of Romanian and Bulgarian nationals ended in 2014. In the 2019 to 2020 tax year, Romanian nationals received the second highest amount of tax credits and Child Benefit of all EEA and Swiss nationals

Figure 4: Income Tax, Class 1 and 4 NICs, tax credits and Child Benefit payments for non-EEA nationals in 2019 to 2020 tax year

The key points to note from figure 4 are:

• Indian nationals contributed the most in Income Tax and NICs of any non-UK nationals at £5.3 billion. This accounted for more than 20% of all contributions from non-EEA nationals

• USA nationals contributed the second highest amount in Income Tax and NICs of non-EEA nationals at £3.6 billion, accounting for more than 13% of contributions from non-EEA nationals

• Pakistani nationals received the highest total amount of tax credits payments at £580 million and the highest total amount of Child Benefit payments at £149 million of any non-UK nationals

• Indian nationals received the second highest amount of Child Benefit payments among non-EEA nationals at £118 million and Bangladeshi nationals received the second highest amount of tax credits payments at £255 million

4. Shares of total income (before and after tax) and Income Tax for percentile groups: all migrants and those recently arrived

‘Recently arrived’ covers the latest 4 years of data available. For the purpose of these estimates, this means that the effective date of arrival is from 6 April 2016 to 5 April 2020 inclusive.

Figure 5: Percentile points of total income before tax for EEA and Swiss nationals

The key points to note from figure 5 are:

• for EEA and Swiss nationals, the bottom 10% of taxpayers had a total income before tax of £14,800 or less. At the upper end of the distribution, 10% of taxpayers had a total income before tax of more than £51,800

• for recently arrived EEA and Swiss nationals, the total income before tax was £14,100 for the bottom 10% of taxpayers and £39,300 for the top 10% of taxpayers

• for EEA and Swiss nationals, the mean income before tax was £36,100, compared to £28,000 for those who had recently arrived

Figure 6: Percentile points of total income before tax for non-EEA nationals

The key points to note from figure 6 are:

• for non-EEA nationals, the bottom 10% of taxpayers had an income before tax of less than £15,300. At the upper end of the distribution 10% of taxpayers had an income before tax of more than £74,600

• for recently arrived non-EEA nationals, the total income before tax was £14,900 for the bottom 10% of taxpayers and £78,500 for the top 10% of taxpayers

• for non-EEA nationals, the mean income before tax was £46,000. This increased for those that had recently arrived to £47,100

5. Analysis of non-UK nationals according to their highest rate of Income Tax liability

Figure 7: Number of individuals liable to pay Income Tax by highest rate of liability

Nationality	Higher rate or above (thousands)	Basic rate (thousands)	Total (thousands)
EEA	240	2,004	2,244
Non-EEA	327	1,303	1,630

The key points to note from figure 7 are:

• the total number of EEA and Swiss national taxpayers liable to pay Income Tax in the 2019 to 2020 tax year was 2.2 million. Of these taxpayers, 0.2 million were liable to pay Income Tax at the higher rate or additional rate and 2.0 million were liable to pay Income Tax at the basic rate

• the total number of non-EEA national taxpayers liable to pay Income Tax in the 2019 to 2020 tax year was 1.6 million. Of these taxpayers, 0.3 million were liable to pay Income Tax at the higher rate or additional rate and 1.3 million were liable to pay Income Tax at the basic rate

6. Contact details

6.1 Statistical contacts:

T Curd

M Kippax-Jones

migrationanalysis@hmrc.gov.uk

6.2 Media contact:

HMRC Press Office

03000 585158

6.3 Feedback and questions

We strive to improve the quality and accessibility of our National Statistics. Your feedback is crucial in this process. Outside of the user engagement exercise, we also welcome your suggestions on any of the Statistics and commentary in this publication. If you have any feedback or queries, please contact the Statisticians named in the Statistical contacts section, participate in HMRC’s user engagement exercise or use HMRC’s user engagement form