Trading profits are generally taxed where the trade is carried on. Move your desk to another country and the profits usually move with it — regardless of where the clients are.
The mental model most freelancers carry into a move is that UK clients mean UK tax. It is an understandable inference and it is generally the wrong way round. For self-employment, the profits of a trade are broadly taxable where the trade is carried on — which for a one-person consultancy means wherever you are physically doing the work.
Once you are non-resident and working entirely abroad, income from UK clients is usually outside UK income tax, and taxable instead in the country where you now live. That is generally good news and it comes with a full set of obligations attached, in a language you may not read.
What Changes on the UK Side
- Your trade generally leaves UK charge once you are non-resident and the work is done abroad, unless you carry on a trade in the UK through a branch or agency.
- Class 2 and Class 4 National Insurance stop being due on that basis, though voluntary contributions may still be worth making — see voluntary NI abroad.
- Self Assessment may continue if you have other UK income, and there is usually a final return covering the year of departure — see when to stop filing.
- Payments on account already scheduled will still fall due after you go. They can often be reduced — see payments on account.
UK clients do not withhold tax from freelance invoices in the ordinary case, so nothing on their side will signal the change. The construction industry scheme is the notable exception, and it operates on UK construction work regardless of where the contractor lives.
What Changes on the Other Side
You will typically need to register as self-employed or as a business in your new country, file there, and pay both income tax and local social security contributions. Social security is the item most often forgotten, and in several countries it is the larger of the two charges for a self-employed person. Our A1 certificate guide explains the framework that decides which country's system applies.
| Question to answer before you go | Why it matters |
|---|---|
| How do I register as self-employed there? | Often required before the first invoice |
| What are the local social contributions? | Frequently larger than the income tax |
| Is there a minimum or presumed income basis? | Some systems charge regardless of profit |
| What are the invoicing requirements? | Some countries mandate specific formats or e-invoicing |
| Do I need a local bank account? | Usually, for both tax and getting paid |
The VAT Question
VAT does not follow income tax and needs looking at separately. The place of supply rules for services determine where VAT is due, and they turn on whether the customer is a business or a consumer and where each party belongs. A UK-registered freelancer who moves abroad will usually need to deregister for UK VAT, and may need to register in the new country under its own thresholds, which can be far lower than the UK's — some countries have effectively none for non-established businesses.
IR35 Is Not the Issue It Was
UK off-payroll working rules are aimed at engagements where a worker provides services through an intermediary to a UK client. Where the worker is genuinely non-resident and working entirely abroad, the analysis changes substantially, though clients often apply their processes mechanically and may still ask for status determinations. Our IR35 guide covers the UK position; expect to have to explain your circumstances to procurement departments more than once.
Getting Paid
The unglamorous half of this is currency. Invoicing in sterling and living on another currency means every payment carries an exchange decision, and retail bank conversion typically costs more than any tax you are optimising. Our note on currency risk covers the options, and keeping a UK bank account covers the mechanics of receiving sterling in the first place.
Frequently Asked Questions
If my clients are in the UK, do I pay UK tax?
Usually not, once you are non-resident and doing the work abroad. Trading profits are broadly taxed where the trade is carried on, which is where you physically work rather than where the client is.
Do I still pay UK National Insurance?
Generally not on that self-employment once you are working abroad, though voluntary contributions may still be worth making to protect State Pension entitlement.
What about VAT?
It is a separate analysis. You will usually deregister for UK VAT and may need to register locally, and some countries have very low or no registration threshold for non-established businesses.
Does IR35 still apply to me?
The off-payroll rules are aimed at UK engagements through an intermediary, and the analysis changes substantially where you are genuinely non-resident and working abroad. Expect UK clients to ask about it anyway.
Related Guides
Keep reading with these related guides and calculators:
- Moving abroad with a company — if you trade through a limited company
- A1 certificates — which country's contributions you pay
- Payments on account — the bill that follows you
- Currency risk — getting paid in the wrong currency
- IR35 guide — the UK status question
- Day rate calculator — what your rate is worth before you move
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