The Future of Work: Tax Implications for UK Remote Workers

Lockdown provisions due to pandemic have changed the landscape of the working world faster than ever. The biggest shift is the rise of employees more inclined to work remotely. With the advance in technology, even after the lockdowns are no more, many people in the UK are working remotely. Now people are paying more emphasis to achieve a work-life balance. So, the future of working is indeed remote working, but it is full of complexities because of tax implications.

In the present scenario, HMRC approves to pay a tax free payment of £6 per week to any one working from home even if there are no records to support the evidence of the cost, and if you want more deduction, you must keep your records straight. To know more, let’s explore the two scenarios of remote working. 

Working remotely for a UK-based company from within the UK

If you are UK tax resident but working remotely for a UK-based company, you are obliged to pay the income tax on your worldwide income that you have earned from your remote work. Remember, if you are spending 183 days or more as an employee while staying in the UK, you are a UK tax resident. You may also have to make National Insurance Contributions (NIC) as per your income level.

Furthermore, you can claim personal allowance. It is presently £12,570 for 2023-24, and you can also claim some deductions for your work-related expenses. Some of these can be for computer equipment, office supplies, phone and internet bills, and so on related to your work. 

Working remotely for a UK-based company from outside the UK

If you are working remotely for a UK-based company while staying overseas, but still a UK tax resident, you have to pay income tax like others until there is no change in your tax residency status. If you are both a UK resident a resident of an overseas country, it is likely that you will be subjected to double taxation. To mitigate this scenario of double taxation (paying tax in your host country and UK), you may also get some tax deductions in the UK. However, make sure you have all the records of your income and expenses as a proof. 

Agree or not, the world of taxes, especially that of UK is a complex maze. You may find it tough to navigate without seeking any professional advice.

So, hire a seasoned accountant or tax advisor and navigate the complications of remote work taxes. This way, you can stay informed of tax changes (if any) and make the most of your remote working journey without having stress. So, get in touch with a professional and enjoy your life as a remote working warrior.