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Digital Nomad

Overseas Workday Relief: What Qualifying New Residents Need to Know

From 6 April 2026, UK employers must cap PAYE notifications for Overseas Workday Relief at 30% — discover how this impacts nomads and globally mobile workers.

By NomadicTax Research Team · 5-8 min read

Understanding Overseas Workday Relief (OWR)

Overseas Workday Relief is designed for qualifying new residents — individuals moving to the UK from abroad but spending some working days overseas. It allows a portion of income earned outside the UK (“non-PAYE earnings”) to be excluded from UK PAYE withholding, easing tax burdens for those with splits in their work locations.

What Changes From 6 April 2026?

  • Employers submitting a PAYE notification (formerly known as a section 690 form) for employees eligible for OWR must estimate non-UK, non-PAYE income, and ensure it does not exceed 30% of total earnings. (gov.uk)
  • This cap aligns with the maximum relief claimable through the employee’s Self-Assessment tax return and aims to reduce underpayments. (gov.uk)
  • Applies from the 2026-2027 tax year onward, and does not apply to employees under transitional provisions. (gov.uk)

Implications for Digital Nomads & Globally Mobile Individuals

  • If you're a digital nomad or frequently working abroad and eligible for OWR, expect that your PAYE obligations will adjust. Your employer must manage notifications cautiously — an estimate over 30% could lead to under-collection or compliance issues.
  • If your non-UK earnings are likely to exceed that threshold, you’ll want it reflected accurately and anticipate what you’ll pay via Self-Assessment.

Actionable Advice

  • Ensure your employment contract and timesheets clearly document your work days abroad vs in the UK to support calculations.
  • Speak with your employer’s payroll or tax department before April 2026 to confirm how they will apply OWR notifications.
  • Consult a tax advisor if your non-UK income may vary or if you have transitional status that delays the rule.

Example Scenario

Imagine you earn £100,000 annually, with £40,000 expected to come from work done outside the UK. From 6 April 2026, your employer can notify HMRC that up to £30,000 (30%) of your income is non-UK. Anything above that may prompt PAYE on the full amount in practice, even if Self-Assessment later or correctly accounts for overseas work. Ensuring accurate estimation prevents surprises.

This change reflects HMRC’s efforts to standardize and close gaps in PAYE under­statements — particularly relevant for the growing mobile workforce.

Sources

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