Working Remotely Abroad For A UK Company

Working remotely abroad for a UK company is no longer unusual, and digital nomads are only part of the picture. Your lifestyle may be flexible, but your UK tax position isn't. Before you go, you need to know how HMRC will treat your residence status, your salary, and any bonus or equity that lands after you've left.

This guide covers UK personal tax for employees working remotely for a UK employer. It doesn't deal with tax in your new country, immigration, or your employer's corporate obligations, though we flag where those matter.

The key question is simple. If you leave the UK, when does HMRC stop taxing your salary?

Split-year treatment: when non-resident treatment starts

Why does residence matter so much? Because once you're non-resident, HMRC can only tax the salary for work you physically do in the UK. Getting to non-resident status, and getting the timing right in the year you leave, is the turning point.

If you leave part-way through a tax year, you can be treated as non-resident from your first day of full-time work overseas under split-year Case 1: starting full-time work overseas. You can meet this even while working for a UK employer, because what matters is where you physically work, not where your employer is based or where you're paid.

Image 1 — split-year Case 1 needs two tax years to line up

A critical point is often missed. To use Case 1, you must also be non-resident in the following tax year through the full-time work abroad test. In practice that means:

• working an average of 35 hours or more a week overseas, without significant breaks

• spending fewer than 91 days in the UK

• working more than three hours a day in the UK on fewer than 31 days

Fail that in the next year and Case 1 fails for the year you left. Unless another split-year case applies, you're UK resident for the whole departure year and taxed on your worldwide salary for it. In the departure year itself, the UK day and UK workday limits are reduced proportionally for the overseas part.

For later years, the most reliable approach is to keep meeting the full-time work abroad test by working full-time overseas and managing your UK days and workdays. See our guide to all eight split-year cases and our Statutory Residence Test 101.

👉 HMRC guidance: RDR3 Statutory Residence Test (including split years)

How your salary is sourced once you're non-resident

Where is your salary taxed if you're non-resident? For UK purposes, employment income is sourced to where the duties are physically performed. Under section 27 ITEPA 2003, a non-resident employee is only taxable in the UK on earnings for UK duties. HMRC looks at where you work, not where your employer is based or where your salary is paid.

Where you work partly in the UK and partly overseas, HMRC normally apportions your salary by workdays: UK workdays against total workdays in the period.

Image 2 — how workdays are apportioned

• 10% of workdays in the UK: HMRC taxes the 10% UK portion only, provided you're non-resident.

• 0% of workdays in the UK: HMRC has no taxing right over your salary.

Duties in the UK that are "merely incidental" to your overseas job, such as a short briefing trip, can be treated as performed abroad, but that's a narrow exception. Most real work done here counts.

👉 HMRC manual: section 27 ITEPA 2003, UK duties of non-resident employees (EIM40110)

This is why record keeping matters. Keep travel records, work calendars and evidence of where your duties were performed. If HMRC asks, you'll need to show it day by day.

Bonuses and equity: when are they taxable?

What about bonus payments, share awards or other deferred pay? They aren't taxed by reference to the payment date alone. They're sourced to the period in which they were earned or vested. Leaving the UK doesn't automatically take a later payment out of UK tax.

Bonus example

• You're UK resident and working in the UK for the whole of the 2025 calendar year.

• You leave the UK on 1 January 2026 and become non-resident, with no UK workdays afterwards.

• In April 2026 you receive a bonus for your 2025 performance.

The bonus is wholly taxable in the UK, because it was earned entirely during your UK period. Being paid after you left doesn't change where it came from.

Equity example

• You're UK resident for the whole of the 2025 calendar year.

• You leave on 1 January 2026, become non-resident and do no UK work in 2026.

• RSUs granted on 1 January 2025 vest on 31 December 2026.

HMRC taxes roughly 50% of the value at vesting, being the half of the grant-to-vest period when you were UK resident. The other half, earned while working wholly overseas, is outside UK income tax. The date the shares are delivered isn't decisive. The gain is sourced back to the period in which it was earned.

Equity has more traps than bonuses: graded vesting, option exercise timing and payroll withholding all change the answer. See our full guide to RSUs and share options after you leave the UK.

The personal allowance for non-residents

What if you still have UK income after you leave? UK and EEA nationals keep the UK personal allowance while non-resident. Others may qualify under a double tax treaty.

In practice, that means there may be no UK tax at all on a small amount of UK-sourced income, such as a few UK workdays or a trailing bonus, because the allowance covers it.

👉 HMRC manual: personal allowance entitlement for non-residents

Using form P85 to stop UK tax on your salary

How do you stop UK tax being deducted from your salary once you've left? You can submit form P85 to tell HMRC you've left, that you're non-resident and that you're working full-time abroad. If HMRC accepts the facts, it may issue an NT (no tax) code to your employer, so your salary is paid without UK PAYE.

Three points to be aware of:

• Self Assessment filers usually report their departure on the tax return instead. But if you're working full-time abroad for a UK employer for at least a full tax year, HMRC's guidance asks for a P85 and a Self Assessment return with the SA109 residence pages.

• Some UK workdays? An NT code may not be appropriate, because PAYE still applies to the UK portion. A reduced code or year-end reconciliation may fit better.

• The P85 doesn't make you non-resident. Your status still comes from the Statutory Residence Test each year.

👉 HMRC guidance: Get your Income Tax right if you're leaving the UK (P85)

For a step-by-step walkthrough, read our P85 form guide.

The Self Assessment route

What if you'd rather not change payroll straight away? Some people leave payroll as it is during the tax year and deal with it afterwards through a UK tax return. PAYE may keep being deducted at first. You then file a return to:

• claim non-resident status

• apply split-year treatment where available

• report the correct UK workday allocation

• reclaim any excess UK tax deducted through payroll

This route suits you if your facts are still developing, if your employer won't change payroll mid-year, or if you want the final position reconciled in one place. HMRC's free online service can't file the SA109 residence pages, so you'll need commercial software or a paper return. See do I need to file a UK tax return? for the deadlines.

👉 HMRC guidance: Register for Self Assessment

What else to check before you go

Personal UK tax is only one piece. Before you start working abroad, check:

• Tax in your new country. It will usually tax your salary once you're resident there, and may require local payroll or withholding.

• National Insurance. Whether you stay in UK NI or move to the local system depends on social security agreements, not the Statutory Residence Test. If you leave UK NI and want to protect your State Pension record, note that voluntary Class 2 contributions from abroad ended on 6 April 2026. Only Class 3 is now available, and new applicants generally need 10 years of prior UK residence or contributions.

• Your employer's position. Having an employee working abroad can create payroll, employment law and permanent establishment questions for the company. Raise it with HR before you leave, not after.

• Digital nomad plans. If you'll move between countries rather than settle in one, full-time work abroad and the country tie need extra care. See digital nomad tax and the 183-day myth.

👉 HMRC guidance: National Insurance if you go abroad

Frequently asked questions

Do I pay UK tax if I work remotely abroad for a UK company?

If you're UK resident, yes, on your whole salary wherever you work. If you're non-resident, the UK only taxes the salary for workdays physically spent in the UK. Where your employer is based doesn't decide it.

Can I get split-year treatment if my employer is in the UK?

Yes. Split-year Case 1 depends on where you physically work, not where your employer is. You must work full-time overseas for the rest of the departure year and meet the full-time work abroad test in the following tax year too.

How many days can I work in the UK while non-resident?

Under the full-time work abroad test, you need fewer than 31 days working more than three hours in the UK and fewer than 91 days in the UK in total. Those UK workdays remain taxable in the UK.

Is a bonus paid after I leave the UK taxable in the UK?

It can be. Bonuses are sourced to the period in which they were earned, so a bonus for work done while you were UK resident is taxable in the UK even if it's paid after you've left.

How do I stop PAYE on my salary after moving abroad?

Submit form P85 so HMRC can consider issuing an NT code to your employer. Alternatively, leave payroll unchanged and reclaim overpaid tax through a Self Assessment return with the SA109 residence pages.