Nomad Nightmares 🚩
Escaping the UK weather is the easy part — just because you have upgraded your Greggs sausage roll to an acai bowl, this may come with a side of tax trauma. Skip the stress — get clued up now, or HMRC might be calling you sooner than you think!
Sole traders…but I’m just a freelancer trap
So you quite your 9-5 corporate life and now you are are a freelancer/ online fitness coach / social media personality living the high life in Bali, Thailand or Dubai. Sounds simple right, why should you have tax issues since you no longer live in the UK.
UK Residence
For those wanna be nomads who have bolted from the UK, don’t expect HMRC to just wave goodbye to you. You might still count as UK resident for the current tax year (April–March) and even the one after, depending on how often you pop back and how many UK ties you keep.
Why you should care: UK residents pay tax on all worldwide income and gains — yes, even that Bali beach bar side hustle.
The only way to know for sure? Work through the Statutory Residence Test (SRT) for each tax year or let us do the hardwork for you. It’s a “delightful” piece of legislation (note the sarcasm) that decides your fate based on days spent in the UK, your home(s), work patterns, and personal connections. Don’t take this for granted.
Nerdy stuff : SRT lives in Schedule 45 of Finance Act 2013
Place of business
If you started your side hustle in the UK then just because you are now living in a new country (i.e. not UK resident) does not mean the original UK trade had ceased. The questions HMRC are looking to know are
1) Was the business started overseas or did you have a hobby/side hustle or business whilst you were UK resident.
2) Do you have any UK clients, UK Bank account(s) or a UK business address
3) Do you invoice from UK, have any contracts with UK or any other UK function currently.
If HMRC can argue that your place of business is still situated in the UK, they will want to tax you on your UK trade regardless of where your laptop is currently located.
Nerdy stuff: s6 ITTOIA 2005 para 2 says that even if you are a Non UK resident, profits from your trade are taxable in the UK if they are carried out wholly or partly in the UK.
UK Business expenses - Can i expense my cocktail? 🍹
Unless, your trade is about food and beverage …No. And even then there must be some context behind it.
Business expenses must meet the “Wholly and Exclusively” test. If there is a private element then unless it can be accurately quantified, it will likely not be allowed. Thats because HMRC argue that genuine business expenses should not have a duality of purpose (being business and private).
✅Safe Nomad Expenses usually are:
💻 Software subscriptions (Zoom, Notion, Canva, Adobe etc.)
🧾 Professional fees (accountants, lawyers, tax advice — hello 👋)
🛡️ Business insurance
👥 Genuine co-working spaces
🚩 Red flag expenses for most
✈️ Flights you took partly for business and fun
🏝️ Accommodation that doubles as your home office
☕ Daily coffees and “working lunches” or networking? Even if you are dining with clients, business entertainment is always a no.
Also, your kid’s pizza party is not a business expense. Family gatherings are annoying enough — let’s not invite HMRC to the party too.
Nerdy stuff: The “Wholly and Exclusively” test is found in s34 ITTOIA 2005.
Nomads & Companies
Company Residence 🌍
Just like those pesky freelancers, a company’s tax residence decides whether HMRC can chase you or not.
Your company is UK-resident if:
a) It’s incorporated in the UK (well, duh!).
b) It’s a foreign company but managed and controlled in the UK — i.e. the board calls the shots there.
Why care? If it’s UK-resident, all profits get hit with UK corporation tax (currently 25%).
“Managed and controlled” is just fancy tax-speak for where the big decisions happen: board meetings, contract signings, financing approvals — basically, where the brain of the company lives.
📌 Keeping Your Company Non-UK Resident? Do This:
✅ Hold board meetings abroad (and keep proper minutes — “met at the beach bar 🍹” won’t cut it).
✅ Sign contracts outside the UK — airports and London cafés don’t count.
✅ Appoint local directors who actually have decision-making power (not just nameplates).
✅ Make sure business strategy is planned and documented overseas, not scribbled on a napkin in Pret at Paddington.
Nerdy stuff: Company residency rules sit in s14 CTA 2009. But here’s the kicker — even if you incorporate abroad, if your company is “managed and controlled” from the UK, HMRC can still treat it as UK resident. That principle comes from case law, the big one being De Beers Consolidated Mines Ltd v Howe (1906).
