Digital Nomad

Digital Nomads & Taxes: How the UK’s Making Tax Digital Expansion Will Impact Remote Workers

With HMRC expanding Making Tax Digital (MTD) to more Income Tax Self-Assessment filers from April 2028, remote workers and digital nomads with UK income above £20,000 need to understand compliance changes and plan ahead.

By NomadicTax Research Team • 5-8 min read • November 22, 2025

## What’s Changing Under the MTD Expansion From **6 April 2028**, HMRC will require **sole traders and landlords** with **gross trading or property income over £20,000 per year** to file their Self-Assessment using digital tools. ([gov.uk](https://www.gov.uk/government/publications/supporting-documents-for-spring-statement-2025/spring-statement-2025-policy-costings?utm_source=openai)) This extends Making Tax Digital (MTD) beyond VAT to cover more individuals including digital nomads earning UK-sourced income. Those below £20,000 may still be subject to reporting burdens but with potential exemptions. ([gov.uk](https://www.gov.uk/government/publications/supporting-documents-for-spring-statement-2025/spring-statement-2025-policy-costings?utm_source=openai)) Meanwhile, late-payment penalties for those covered by MTD will increase starting **from 6 April 2025**. Overdue taxes: 3% penalty after 15 days, additional 3% after 30 days, and 10% per annum if more than 31 days late. ([gov.uk](https://www.gov.uk/government/publications/supporting-documents-for-spring-statement-2025/spring-statement-2025-policy-costings?utm_source=openai)) ## Why It Matters for Digital Nomads If you're working for a non-UK company but have UK property, or you’re UK resident and earning from overseas but getting into UK-tax rules, this expansion means: - You may need to start using **software to track income and expenses** in real time. Manual or paper-based records will no longer suffice under MTD. - Missing deadlines could lead to **steeper fines** due to new penalty structure. - The shift pushes privacy and data management in your finances, demanding accurate documentation of international income, currency conversions, and overseas tax credits. ## Practical Planning Tips - **Get software now**: Familiarise yourself with MTD-compatible accounting tools (e.g. Xero, QuickBooks, FreeAgent). Test them out so reporting is smooth come April 2028. - **Track all income**: Don’t forget sources like platforms abroad, investments, or property. Overseas income may have reliefs but needs recording. - **Understand UK residencies and non-dom rules**: The Autumn Budget 2024 abolished the remittance basis. As of 6 April 2025, non-UK domiciled individuals pay under a new residence-based regime. ([gov.uk](https://www.gov.uk/government/publications/autumn-budget-2024-overview-of-tax-legislation-and-rates-ootlar/841ddc37-58e0-4d3f-9b53-123e8903d274?utm_source=openai)) - **Plan cash flow**: Penalties kick in quickly—by 15 days overdue. Having emergency funds or using scheduled payments can help manage unexpected tax liability. - **Seek professional advice** especially if your foreign income has already been taxed overseas—ensure double taxation reliefs apply properly and that you’re making the correct claims. ## Example Scenario **Alice is a UK resident digital nomad** working remotely for a US tech company. She also rents out a London flat with £6,000 gross income annually. Her total UK trading and property income exceeds £20,000, so from April 2028 she must use MTD for her Self-Assessment. She adopts accounting software now, records income and deductible expenses monthly, reconciles bank and foreign transactions, and ensures tax bills are paid within 30 days of due date to avoid the larger penalties. She also checks how her overseas earnings are taxed there, and claims foreign tax credit in the UK. ## Key Takeaways - If you expect UK income from trading or property above £20,000 between remote work and assets, start preparing now. - New penalty rates make late payments more costly. - Accurate recordkeeping and using software tools are not optional—they’re mandatory under MTD. - Non-dom and residency changes also affect taxation of overseas income and gains—get ahead on those. Being proactive now will help digital nomads avoid surprises—making the transition to full compliance smoother when April 2028 comes around.