How does working remotely (outside UK) for most of the year affect my tax return?

Question

I've been working in London (UK) as a freelancer for 4 years and just recently decided to try a more "location independent" way of life, travelling around the world while working remotely. I started this last June, so this has been my situation for most of the last fiscal year (more than 9 out of the last 12 months) Although I've been moving around and living in different countries, I haven't stopped working (and invoicing) as a UK freelance for different UK based companies during all this time, so my questions would be...

Does that affect my taxes in any way? Do I still have to pay taxes in UK? Does my "non-resident" status change something?

Is there some special box that I should tick in the tax return? Anything I should have in mind?

Thanks in advance for your help!

Answer 1

WRITE to the tax office for advice so you get an answer in writing.

You cannot outsource your tax responsibility so even if you get the best accountant that does your books, an audit could contradict their efforts leaving you responsible to pay more tax. An IT contractor friend of mine got audited late last year - the tax man reviewed five previous years and sent him a bill for 125,000GBP. The taxman has decided to interpret IR35 more harshly now than during the past ten years.

I suggest you write (as opposed to call) the tax office because laws are based on intent and if you were to face some audit in the future, if you have advice in writing, it will help support that you sought and followed advice and had no ill intent.

Your tax liability varies depending on the amount of time you have spent in the UK and different laws apply based on the amount of time you spend in the UK within a single year, and on average over four consecutive years.

Your liability will also differ if you travel for pleasure or business trips (thus working remote at a clients international ofice for extended periods).

I spent years working under my UK Limited Company but living/working in various European countries outside of the UK - I believe I 'won' a lower tax liability, but I eventually left the UK (no longer resident).

Answer 2

You should check the UK Taxes website(whatever that may be). They should give you instructions on how taxes work when you are self-employed. I would assume that you would still pay taxes in the UK since that is where you have been working and invoicing.

I'm sorry, I don't know what the UK tax form looks like. I live in the US so I only know what the US tax forms look like.

I would have to say that this is a question that should be asked in the UK tax officials.