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If I am employed by a UK company and change country of residence regularly, will I have to pay income tax anywhere?

Personal Finance & Money Asked on July 16, 2021

I am a salaried employee in a UK company and currently have income tax automatically deducted from my monthly pay in the normal PAYE way.

I am considering, covid-19 permitting, of going "digital nomad" and living for a couple of months at a time in various EU countries.

According to gov.uk "If you’re not UK resident, you will not have to pay UK tax on your foreign income." and according to this my non-residency is determined by a few factors, but I will definitively non-resident if I have spent more than 183 days away. Similarly, I will only be classed as resident in Spain (for example) if I am there for more than 183 days.

So if I keep moving every couple of months, would I be exempt from paying income tax anywhere, after 183 days, (or maybe sooner?)

One Answer

Yes. It says right in your linked source: "The basic tax rule is that non-residents are only chargeable to tax on income arising from a source in the UK." So when you're not a resident in the UK you're still taxed on income from a company based in the UK.

Also mentioned in that source are double tax treaties, which are treaties the UK has with many countries (including Spain). Basically you're going to pay tax, just not, hopefully, extra taxes: "Double tax treaties can be complex and often will require professional assistance, but they are created to try to ensure that an individual is able to claim tax relief rather than have to pay tax on the same income in two different jurisdictions."

Answered by HenryM on July 16, 2021

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