Before you start

A National Insurance number
PAYE registration through your employer
A Government Gateway account, if you need Self Assessment
Records of foreign income, overseas accounts and any share options

Step-by-step

1
Check the tax code on your first payslip
PAYE deducts at source, so a wrong code means wrong deductions for months. Give your employer any P45 from a previous UK job. The code should not begin with an S — that is the Scottish prefix and payroll occasionally applies it in error.
Via employerWho: YouFirst payslip
2
Learn the three English bands
A personal allowance, then Basic, Higher from £50,270 and Additional from £125,140. Fewer bands than Scotland's six and a materially later Higher rate threshold. The thresholds have been frozen for several years, pulling more people into higher bands each year as wages rise.
OnlineWho: You
3
Know about the 60% band above £100,000
The personal allowance is withdrawn at £1 for every £2 earned above £100,000, producing an effective marginal rate near 60% between £100,000 and £125,140. Pension salary sacrifice is the standard response. Senior research and industry salaries in Cambridge land in this band often enough that it is worth modelling before you accept.
OnlineWho: You
4
Work out whether your funding is taxable
Stipends, fellowships, scholarships and grants are treated differently from salary, and the distinction is not always obvious from the payment schedule. Some are outside income tax entirely and some are not. Ask your department's finance office to tell you in writing which category yours falls into rather than inferring it from whether tax was deducted.
Via employerWho: You
5
Take advice before you exercise spinout share options
Cambridge has an unusual density of university spinouts and startups paying partly in equity. How and when options are taxed depends heavily on the scheme they were granted under, and a decision made carelessly at exercise is expensive and irreversible. This is one of the genuine cases for paying an accountant.
In personWho: You
6
Work out your residence position in year one
The Statutory Residence Test determines UK tax residence by days present and connecting factors. With foreign income, overseas grants or assets abroad, take advice in the first year — the UK replaced the old non-domiciled regime with a residence-based system and the transitional rules are complex.
In personWho: You

Documents you’ll need

National Insurance number
P60 — the annual summary from your employer
P45, if you change jobs during the tax year
Grant, stipend or fellowship award letters stating the tax treatment
Share option grant documents and the scheme they were issued under

Things most newcomers don’t know

The 60% band between £100,000 and £125,140 is the largest hidden rate in the system.

The personal allowance is withdrawn at £1 for every £2 above £100,000, so each extra pound in that range attracts the 40% headline rate plus the allowance lost — around 60% in effect. Senior Cambridge salaries in industry and clinical academia frequently sit in exactly this band, and a pay rise into it delivers far less than it appears to. Salary sacrifice into a pension is the standard remedy.

Source: GOV.UK — Income Tax rates and Personal Allowances

Stipends and salaries are not the same thing for tax, and payroll may not tell you.

Cambridge pays a large number of people through fellowships, studentships and grant-funded posts. Whether an award is taxable earnings, a non-taxable scholarship, or something in between depends on its terms rather than on how it arrives in your account. Getting the answer in writing from your finance office in month one is far cheaper than discovering it during a Self Assessment enquiry.

Source: HMRC — employment income and scholarship income guidance

Spinout equity is where Cambridge people actually lose money to tax.

The university and its research institutes generate an unusual number of spinouts, and equity is a normal part of compensation here in a way it is not in most English cities. The tax treatment turns on the scheme the options were granted under and the timing of exercise, and the difference between handling it well and badly is large. This is the one situation where an accountant pays for themselves.

Source: GOV.UK — tax and employee share schemes

The tax year runs 6 April to 5 April, which catches everyone once.

Almost no other country uses these dates. It determines which year your arrival income falls into, when your P60 arrives, and when Self Assessment is due. Newcomers routinely compute against a calendar year and get their first filing wrong.

Source: HMRC

Common mistakes to avoid

Not checking that your PAYE code is right, and in particular that it does not carry a Scottish S prefix.
Assuming a stipend or fellowship is tax-free because no tax was deducted at source.
Exercising spinout share options without taking advice on the scheme's tax treatment first.
Accepting a salary between £100,000 and £125,140 without modelling the 60% effective band.
Counting your tax year as January to December rather than 6 April to 5 April.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.