Live Abroad and Work for a UK Company | Expat Tax Advice UK

Introduction

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As more professionals embrace the remote work and digital nomad lifestyle, one key question arises, can you live abroad and still work for a UK company? The answer is yes, but your UK tax obligations depend on how HMRC views your residency status. At Global Tax Consulting, our UK expat tax experts explain how to stay compliant, avoid double taxation, and make the most of international work opportunities.

While it’s entirely possible to work for a UK company while living overseas, the tax position can become complex. Your liability to pay UK income tax depends on where you’re physically performing your work and whether you remain a UK tax resident under HMRC’s Statutory Residence Test (SRT). If you’re a UK national planning to live and work abroad full-time, understanding how your UK tax residency, HMRC rules, and PAYE system interact is essential. Failing to plan your move correctly could mean paying tax twice, once in the UK and again in your country of residence. That’s where professional UK expat tax planning advice can make a real difference. In many cases, you may not be liable for UK income tax on your overseas workdays, if you structure things correctly.

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UK Tax Residency: The Starting Point

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Your UK tax liability primarily depends on your residency status, determined by HMRC’s Statutory Residence Test (SRT). This test reviews how many days you spend in the UK and the nature of your employment abroad. Our UK Tax Residency Assessment service helps you determine your exact status to ensure compliance.
You’re typically classed as non-resident for UK tax purposes if you:

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• Work abroad full-time (35+ hours per week), and spend fewer than 91 days in the UK each tax year, with no more than 30 of those as UK workdays.
• This “full-time work abroad” route allows HMRC to treat your overseas income as outside the scope of UK taxation, even if you remain employed by a UK-based company.

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This is known as the “full-time work abroad” route to non-residency under the SRT. If you meet these conditions, the UK loses its right to tax your non-UK income, including salary earned while physically working overseas—even if your employer is UK-based.

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Split Year Treatment: Leaving Mid-Tax Year

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If you move abroad mid-tax year to begin full-time employment overseas, you may qualify for Split Year Treatment, allowing you to divide the tax year into UK and non-UK parts. This ensures only income earned while you were UK resident is taxed in Britain. More details are available in our HMRC Split Year Guide.

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This means the tax year is effectively split into two parts:


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• UK part – when you were UK resident and subject to UK tax on worldwide income.
• Overseas part – when you became non-resident and are taxed only on UK-source income.


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To qualify, you must meet specific criteria, including:


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• Starting full-time work abroad, or
• Giving up your UK home; and
• Being non-resident in the following tax year.


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This can significantly reduce your UK tax exposure for the year of departure.

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HMRC’s Taxing Rights: UK vs Overseas Workdays

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Once you’re classed as non-resident, HMRC can only tax the income related to work physically performed in the UK. For instance, if you’re based in Spain but work remotely for a UK employer, your Spanish workdays are not taxable in the UK. However, any workdays physically spent in the UK will remain subject to UK tax. Maintaining a detailed workday record is crucial for accurate tax apportionment.

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For example, if you’re living in Spain and working remotely for a UK company, your income related to days physically worked in Spain is outside the scope of UK tax. However, if you return to the UK and work for a few days, HMRC will tax those specific days.


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Keeping accurate records of your travel and work locations is essential if you plan to apportion income between UK and non-UK workdays.

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What If You’re Still on UK Payroll (PAYE)?

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Many UK companies continue to deduct income tax under PAYE, even after you’ve become non-resident. This often leads to unnecessary overpayment of UK tax. You can resolve this by filing HMRC Form P85 when you leave the UK — notifying HMRC that you’re now living abroad. Our guide on claiming UK PAYE tax refunds explains how to recover overpaid amounts efficiently. This is often overcautious and may lead to you overpaying tax unnecessarily. There are two main ways to deal with this:



Submit Form P85 to HMRC

By submitting Form P85, you inform HMRC of your departure and request non-resident tax status. You can also apply for an NT (No Tax) code, ensuring your employer stops deducting tax from your UK salary while you live overseas. However, National Insurance contributions may still apply, depending on your work arrangement. You can request an NT (No Tax) code, which tells your employer to stop deducting income tax via PAYE.

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Note: The NT code does not affect National Insurance contributions, which may still be due depending on your circumstances.

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File a UK Self Assessment Tax Return

If PAYE deductions continue without an NT code, you can reclaim overpaid tax by submitting a UK Self Assessment Tax Return. In your return, you’ll declare your non-resident status and claim relief for overseas workdays. Our UK tax return service for expats can help you file accurately and reclaim every pound you’re owed. You’ll declare your residency status and claim relief for the overseas workdays.

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What About Personal Allowance?

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Most British nationals remain eligible for the UK personal allowance (£12,570 for 2025/26), even if they’re no longer tax residents. This means part of your UK income remains tax-free, reducing your overall tax exposure. If you’re unsure about your eligibility, our UK expat tax advice team can confirm it based on your residency and income sources. This means the first portion of your UK-source income (like UK workdays) is tax-free.


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This allowance can help reduce or eliminate UK tax on any residual UK income.

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Final Thoughts

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In summary, you can absolutely live abroad and work for a UK employer, provided you manage your tax residency, PAYE, and HMRC filings correctly. Filing the right forms (like P85) and maintaining accurate records ensures compliance and maximises your take-home pay. Our specialists at Global Tax Consulting can help you navigate every step, from residency assessment to reclaiming overpaid tax.

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By ensuring you become non-resident, qualify for split year treatment, and use the P85 or a tax return to recover PAYE tax, you can protect your income and maintain compliance with HMRC.


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If you're planning a move abroad or are already working remotely outside the UK, speaking to a specialist UK tax advisor can help you make sure everything is handled properly from day one.