Tax for non-residents working online aka digital nomads

courteneysmith

Hi,
I'm a UK citizen but NOT a resident. I want to work online and continue to live abroad. Assuming I can't pay tax in the country I live in (say, because I move too often, or another reason), what can I do? Am I liable in the UK? Can I register my online business in the UK? I've been trying to get answers for months and it seems that nobody has a clue. Help!

TheCyclingProgrammer

You will most likely be liable to pay tax wherever you are currently living.

00ec25

have a read:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/689240/corporate_tax_and_the_digital_economy_update_web.pdf

as a sole trader you are liable for tax where you are resident, and that is not in the UK. Establishing that your digital income arises in the Uk and is therefore a source to be taxed in the UK (and subject to a double tax agreement if one exists with the country where you do reside) requires more than just who hosts your wensite

on the other hand, if a company, it can obtain a statutory residence certificate, but, for an owner managed one person band a key principle is "where is the management and control based". If you never set foot in the UK then the company will struggle to get UK residency since the control is abroad.

jimmo

That link doesn't work for me but as a general principle most countries seek to tax their residents on their worldwide income and tax non-residents on the income arising in the particular country.
If you are working online whilst in a particular country your income arises in that country and you are taxable in that country.
Nothing to do with tax but do you have the appropriate visas or work permits?

00ec25

jimmo wrote: »

That link doesn't work for me

for some reason MSE dislike long hyperlinks and when they span over more than one line it seems to add a space which you cannot edit out in MSE

so when you click the link, manually delete the gap between the p and the df at the end of the link, works fine then: pdf not p df

Savvy_Sue

DS1 is also a digital nomad, although he does come back to the UK from time to time.

He uses an accountant he never sees, recommended as a specialist in his field (independent computer game developer).

he has a company, which I think is registered overseas. he often collaborates with others, and they're often based outside the UK too.

He does a UK tax return.

So look for an accountant who specialises in your line of work, and in working overseas.

debydiver

Courtney, did you ever get any further with this enquiry. Hubby and I will be doing the same thing next year. Working online (although not earning much) and travelling all over Europe, so not staying in any one place for long. We certainly won't be resident in the UK, no home or ties to the UK, but not sure how to deal with being registered for tax elsewhere.

Cook_County

debydiver wrote: »

Courtney, did you ever get any further with this enquiry. Hubby and I will be doing the same thing next year. Working online (although not earning much) and travelling all over Europe, so not staying in any one place for long. We certainly won't be resident in the UK, no home or ties to the UK, but not sure how to deal with being registered for tax elsewhere.

You may owe tax and social security contributions in each country where you work. Why would you think you would not?

anniecave

I think it works something like this (correct me if I'm missing something)


If you have a main country of residence, then take short trips to other countries, then you may not have to pay income taxes in the other countries (dependant on what work you do) because your liability for earned income may remain with your main country of residence.


You can't however be a resident of nowhere, so if you aren't planning to return back to where you currently are (main country)| then each place you visit would become your main residence unless for example you temporarily visited somewhere short en route to a second destination, in which case the temporary could be disregarded etc.


So someone travelling and working around Europe may end up residing in multiple countries and have multiple tax liabilities if they are working or earning income in those countries.

londoninvestor

anniecave wrote: »

If you have a main country of residence, then take short trips to other countries, then you may not have to pay income taxes in the other countries (dependant on what work you do) because your liability for earned income may remain with your main country of residence.

And generally in fact it depends not just on your residing somewhere else, but being employed by a company that pays you from abroad.

So a foreigner working short-term in the UK is normally in scope of UK income tax, but that's waived if they're resident in a company with a double taxation treaty with us, and they're being paid by an entity outside the UK. (Rather wordy HMRC explanation of this)

Some countries may be more relaxed about that, and some are less (the US for example - I've paid US tax based on short business trips there working for a multinational company; whereas if my American mirror-image did equivalent trips to the UK, they'd have been exempted under the criteria above).

But the general principle is that work income is taxable in at least the country where the work was done, as well as potentially by the country of residence.