The United Kingdom's taxes at a glance
| Tax on $50,000 of revenue | 15% to 25% |
|---|---|
| Tax on $100,000 of revenue | 15% to 25% |
| Effective rate at $100,000On profit, after costs of 15% | 24.3% Source: gov.uk, checked September 29, 2026. Computed: revenue GBP 75,396, profit GBP 64,086, income tax GBP 13,066, Class 4 National Insurance GBP 2,538; total GBP 15,605. Close to the 25% line |
| Tax on $250,000 of revenue | Over 35% |
| Tax system | Worldwide |
| Foreign income, new residents | Untaxed Source: gov.uk, checked September 29, 2026 |
| Social contributions, self-employed | 6% Source: gov.uk, checked September 29, 2026. Class 4 National Insurance for 2026 to 2027: 6% on profits from GBP 12,570 to GBP 50,270 and 2% above. Class 2 is no longer due; it can be paid voluntarily at GBP 3.65 a week |
Structure used: Sole trader (self-employed) paying income tax on trading profit at 20%, 40% and 45% after the Personal Allowance, plus Class 4 National Insurance at 6% and 2%; a UK Ltd paying a GBP 12,570 salary and dividends costs slightly more at every level. Bands are the effective tax on profit for a remote worker using this structure, with clients abroad and costs of 15% of revenue.
UK tax residency: the statutory residence test
The UK tax year runs from April 6 to April 5, and residence for each year is decided by the statutory residence test. You are automatically resident if you spend 183 days or more in the UK in the tax year, or if your only home is in the UK for 91 days or more in a row and you stay in it on at least 30 days of the year.
You are automatically non-resident with fewer than 46 days, or fewer than 16 if you were UK resident in any of the previous 3 tax years, or if you work full-time abroad and spend fewer than 91 days in the UK with no more than 30 of them working. A day counts when you are in the UK at the end of it, under HMRC's day-counting rule, so a day trip from Paris adds nothing.
The sufficient ties test for newcomers
Between those lines, your UK ties decide. A newcomer who was not resident in any of the previous 3 tax years looks at 4 ties: family, accommodation, work and the 90-day tie, and someone who was resident in 1 of those years also counts a country tie. The fewer days you spend, the more ties it takes, as set out in HMRC's RDR3 guidance.
Ties that make you UK resident, by days in the tax year
| Days in the UK | Not resident in any of the previous 3 years | Resident in 1 or more of the previous 3 years |
|---|---|---|
| Fewer than 16 | Not resident | Not resident |
| 16 to 45 | Not resident | 4 ties |
| 46 to 90 | All 4 ties | 3 ties |
| 91 to 120 | 3 ties | 2 ties |
| 121 to 182 | 2 ties | 1 tie |
| 183 or more | Resident | Resident |
2 of the ties are easy for a remote worker to pick up without noticing. You have a work tie if you do more than 3 hours of work a day in the UK on at least 40 days, and freelance work at a laptop counts. You have an accommodation tie if a UK place to live is available to you for 91 days or more in a row and you spend at least 1 night there.
Staying under the UK's day limits as a newcomer
Works
You stay tax resident in Lisbon and spend 100 days of the 2026 to 2027 tax year in London, working from an apartment you rent for 4 months. The work gives you a work tie and the apartment an accommodation tie, but at 91 to 120 days a newcomer needs 3 ties, so you are not UK resident.
Fails
You do the same but stretch the stay to 130 days, still well under 183. The work tie and the accommodation tie are 2 ties, and 2 is all a newcomer needs above 120 days, so you are UK resident for the year.
UK income tax and National Insurance rates for 2026 to 2027
Income tax in England, Wales and Northern Ireland starts with a £12,570 (about $16,700) Personal Allowance, then charges 20% up to £50,270 (about $66,700), 40% up to £125,140 (about $166,000) and 45% above. Scotland sets its own rates on earned income, and the self-employed also pay Class 4 National Insurance on profits.
UK income tax and Class 4 National Insurance on trading profit, 2026 to 2027
| Taxable profit | Income tax | Class 4 National Insurance |
|---|---|---|
| Up to £12,570 (about $16,700) | 0% (Personal Allowance) | 0% |
| £12,570 to £50,270 (about $66,700) | 20% | 6% |
| £50,270 to £125,140 (about $166,000) | 40% | 2% |
| Above £125,140 | 45% | 2% |
| Dividends, after a £500 (about $663) allowance | 10.75%, 35.75% or 39.35% by band | None |
The Personal Allowance is reduced by half of your income above £100,000 (about $133,000) and is gone at £125,140 (about $166,000), so each extra pound in that range costs 40% tax plus 20% in lost allowance: an effective 60%, or 62% with Class 4. Class 2 contributions are no longer due, though you can pay them voluntarily at £3.65 (about $4.84) a week.
| Revenue | £75,396 (about $100,000) |
|---|---|
| Profit after costs of 15% | £64,086 (about $85,000) |
| Income tax20% on £37,700 plus 40% on £13,816 | £13,066 (about $17,300) |
| Class 4 National Insurance6% on £37,700 plus 2% on £13,816 | £2,538 (about $3,370) |
| Total, 24.3% of profit | £15,605 (about $20,700) |
Sole trader in England, no other income. GBP converted at 0.753955 per USD (ECB, September 28, 2026).
How the UK taxes foreign income and remote work
UK residents are taxed on worldwide income, and the only newcomer relief is the FIG regime for people who spent the previous 10 consecutive tax years abroad. 4 details decide whether it helps a remote earner:
- It covers foreign trades only. Relief applies to profits of a trade carried on wholly outside the UK, so freelance work you do while living in the UK is taxed in full even when every client is abroad.
- It excludes foreign employment income. A remote employee cannot use it for salary; Overseas Workday Relief is the separate route for that.
- It has a price. Each year you claim, you lose the Personal Allowance and the capital gains annual exempt amount, which is worth £2,514 (about $3,330) a year to a basic-rate taxpayer with UK income.
- It needs 10 clean years. Anyone UK resident in any of the previous 10 tax years cannot claim, which rules out most returning Britons.
Where the UK and another country both treat you as resident, the tax treaty between them decides, and its tie-breaker starts with where you have a permanent home.
David's note
If you qualify for the FIG regime, I would plan your investment sales and income around the 4 relief years before the move, not after it. The relief is generous but fixed in time, and from year 5 the same portfolio is taxed at full UK rates.
Filing your UK Self Assessment return
Your UK tax year as a sole trader
- Tell HMRC by October 5 after the end of your first tax year as self-employed that you need to file a return.
- File online by January 31 after the tax year ends: for 2025 to 2026, January 31, 2027 online or October 31, 2026 on paper, per HMRC's deadlines.
- Pay the balance by January 31, and payments on account by January 31 and July 31 once they apply to you.
- Claim FIG relief on the SA109 residence pages of the return for each year you want it.
- Keep a day log of where you were at midnight, and a list of your UK ties, for each tax year.
Ways to move to the United Kingdom
| Route | Minimum income or investment | Permit length | Makes you tax resident | Status |
|---|---|---|---|---|
| Innovator Founder visa Source: gov.uk, checked September 29, 2026Self-employed route | Varies | 3 years, renewable | With enough daysNo tax break; the founder is taxed as a UK resident once resident under the statutory residence test. | Open |
Special tax regimes in the United Kingdom
4-year foreign income and gains (FIG) regime
New residents who were outside the UK for at least 10 consecutive tax years can claim full relief on foreign income and gains for their first 4 tax years of residence, and can bring that money into the UK tax-free. It replaced the remittance basis on April 6, 2025.
Open to new applicants. Lasts up to 4 years. Source: gov.uk, checked September 29, 2026 Claimed on the Self Assessment return (SA109) by the first anniversary of the normal filing date.
Temporary Repatriation Facility (TRF)
Former remittance basis users can bring in pre-April 2025 foreign income and gains at a reduced rate. It is not relevant to new arrivals.
Closing to new applicants. Lasts up to 3 years. Source: taxsummaries.pwc.com, checked September 28, 2026 Designations in the returns for 2025 to 2026 through 2027 to 2028.
Running your own company from the UK
The UK's CFC rules charge companies, not individuals. For an individual owner, the rule to know is the transfer of assets abroad code in sections 714 to 751 of the Income Tax Act 2007, which can tax a UK resident on income that arises to a person abroad, such as a foreign company, after a transfer of assets to it.
A company is UK resident if it is incorporated in the UK or if its central management and control is in the UK. That second test is the one that catches nomads: a Delaware or Estonian company whose owner takes every decision from a London apartment can become a UK taxpayer on its worldwide profit.
A UK limited company pays corporation tax at 19% on profits up to £50,000 (about $66,300) and 25% from £250,000 (about $332,000), with marginal relief between, per HMRC's corporation tax rates. Paying yourself a £12,570 (about $16,700) salary plus dividends costs slightly more than staying a sole trader at every income we score, so the company earns its place through limited liability or retained profit, not a lower bill.
Dividends from your own foreign company are taxed at 10.75%, 35.75% or 39.35% after the £500 (about $663) allowance, per HMRC's dividend rates, and are fully relieved in your first 4 years if you claim FIG.
UK taxes for US citizens
US citizens file with the IRS wherever they live. The US and the UK have an income tax treaty from 2001, and the UK is 1 of the 31 countries with a US totalization agreement, which keeps the same self-employment income from paying into both social security systems.
At UK rates, the foreign tax credit usually covers the US income tax on the same earnings, and the foreign earned income exclusion of $132,900 for 2026 is the alternative. A FIG claim works against you here: it cuts UK tax on foreign investment income to 0, which leaves no UK tax to credit, so the US taxes that income in full. Neither the credit nor the exclusion touches the 15.3% self-employment tax.
Watch out: FIG relief does not cover work you do in the UK
4 years of FIG relief, and a full UK bill on your freelance work
A designer who lived in Dubai for 12 years moves to London, claims FIG relief, and expects her $120,000 of fees from US clients to be tax-free for 4 years. The relief covers a trade carried on wholly outside the UK, and she does the work at a desk in London, so the whole profit is UK trading income taxed at up to 45% plus Class 4. Her investment portfolio back in Dubai is what the relief protects.
A claim can even cost money. It removes the Personal Allowance for the year, so a freelancer whose income is almost all UK trading profit can pay more with the claim than without it. Price both before you tick the SA109 box.
The UK also has no digital nomad visa. Outside UK and Irish citizenship, the Innovator Founder route needs a business endorsed by an approved body, so the visa question comes before the tax one.
Who the United Kingdom suits, and who it does not
Good fit
- People who have lived outside the UK for 10 years and hold foreign investments: 4 years of full relief on foreign income and gains.
- Freelancers earning up to about $100,000, where income tax and Class 4 National Insurance stay under 25% of profit.
- UK and Irish citizens, and founders with an endorsed business under the Innovator Founder visa.
Poor fit
- Remote workers without UK or Irish citizenship: there is no digital nomad visa.
- High-earning freelancers: the Personal Allowance disappears at £125,140 (about $166,000) and tax reaches about 39% of profit at $250,000 of revenue.
- Anyone who was UK resident within the last 10 tax years, who cannot use the FIG regime.
