You've packed your bags, started a new life abroad, and waved goodbye to dreary British weather. Surely that means you've also waved goodbye to HMRC, right Not so fast.
One of the biggest misconceptions we hear from expats is that leaving the UK automatically means leaving the UK tax system behind. Unfortunately, HMRC doesn't quite see it that way. If you still have financial ties to the UK: and most expats do: there's a good chance you'll need to file a Self Assessment tax return, even if you haven't set foot in Britain for years.
The good news? Once you understand the rules, it's actually pretty straightforward. Let's walk through the five most common reasons HMRC might still want to hear from you.
This is the big one. If you own a property in the UK and you're renting it out while living overseas, that rental income is taxable in the UK: regardless of where you're tax resident.
Here's how it works: as a non-resident landlord (meaning you're abroad for six months or more per year), you fall under the Non-Resident Landlord Scheme (NRLS). Under this scheme, your letting agent or tenant is legally required to withhold 20% basic rate tax from your rental payments and send it directly to HMRC.
However, you can apply to receive your rent gross (without the 20% deduction) by submitting an NRL1 form to HMRC. This is particularly useful if your allowable expenses: like mortgage interest, repairs, and letting agent fees: mean you'd actually owe little or no tax anyway.
Speaking of mortgage interest, it's worth noting that landlords can no longer deduct mortgage interest as an expense. Instead, you receive a basic rate tax credit on your mortgage interest payments. Either way, you'll need to file a Self Assessment return to report your rental income and claim any relief you're entitled to.
Here's a scenario we see all the time: you work for a UK company, but you're based overseas and perform all (or most) of your duties abroad. Your employer has been deducting UK income tax through PAYE: but should they be?
If you're non-resident for UK tax purposes and you're working outside the UK, you may not actually owe UK tax on that income. HMRC typically apportions your salary based on where the work is physically performed. So if you're sitting in your apartment in Barcelona, Dubai, or Sydney doing your job remotely, those workdays generally aren't taxable in the UK.
The catch? Your employer might not realise this. They see a UK contract and a UK payroll, so they deduct tax as normal. The only way to reclaim that overpaid tax is by filing a Self Assessment return.
If you're in this situation, it's worth getting your UK tax residency properly assessed first. The Statutory Residence Test determines whether you're resident or non-resident, and that status changes everything about how your income is taxed.
This one trips people up constantly. You might be fully tax resident in another country, running your freelance business from a beach in Thailand or a co-working space in Lisbon. But if you popped back to the UK for a few weeks and happened to do some client work while you were there, HMRC may consider that income taxable. The rule is simple: self-employment income earned while physically present in the UK is potentially taxable in the UK, even if you're non-resident.
Now, this doesn't mean every email you answer during a family visit will trigger a tax bill. But if you're doing substantial work: client calls, project delivery, consulting sessions: while on UK soil, you need to be aware of the implications.
For digital nomads who drift in and out of the UK regularly, this can get complicated fast. Keeping a clear record of where you were and what work you did on which days is essential.
Retired abroad and drawing a UK pension? Whether it's your State Pension, a private pension, or a SIPP, this income is generally taxable in the UK by default. However: and this is important: Double Taxation Agreements (DTAs) can change the picture entirely.
The UK has DTAs with over 130 countries, and many of these agreements allow pension income to be taxed only in your country of residence, not in the UK. For example, if you've retired to Spain, Portugal, or Australia, the relevant DTA may mean your UK pension is exempt from UK tax altogether.
To claim this relief, you'll typically need to complete a DT-Individual form and submit it to HMRC. Once approved, HMRC will issue a notice to your pension provider to pay your pension without deducting UK tax.
But here's the kicker: even with a DTA in place, you may still need to file a UK tax return to formally report the income and claim the treaty relief. And if you're receiving pension income alongside other UK income (like rental profits), the interaction between the two can affect your overall tax position.
If you're moving to a specific country and want to understand how the DTA works, we can help you navigate the specifics.
If you are non-resident for an entire tax year, you may benefit from using the disregarded income basis which limits tax on UK interest and UK dividends to tax withheld at source or nil at the time of writing. You can claim this special tax regime for non-residents via self-assessment.
If you've never filed a UK tax return before: or if you stopped filing when you left the UK: you'll need to register for Self Assessment before you can submit a return.
The process is as follows:
Note that if you're already in the Self Assessment system from previous years, you don't need to re-register: but you may need to update your address and residency status.
Key deadlines to remember:
Miss these dates and you'll face automatic penalties, even if you don't actually owe any tax.
Living abroad with UK income? Don’t risk penalties or miss out on refunds. We specialise in UK tax returns for expats — from rental income to pension and employment. Let us handle the paperwork. Request a quote today and stay fully HMRC-compliant.
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