Expenses tax relief for a few months of digital nomading

Hello. During the year I left my apartment for 3 months (stopped paying rent and bills) and lived as a digital nomad. How should I treat this period for tax relief? (rent and utility expenses) Do I need to collect and calculate the cost of all my hostels and Airbnbs? Or, can I just treat it as if I stayed in my apartment and paid rent and utility bills as always? BTW, are there any, rules, recommendations, regulations, or resources for digital nomads? Thanks,

Hi

If you leave the UK at any point in the tax year, you should complete the residency test to determine if you are UK tax resident/resident for tax in another country/qualify for tax relief under Split Treatment :

Statutory Residence Test (SRT)

Your residence status when you move

Thankyou.

Regards.

Thank you. I believe the first link is broken. According to the second link, I was a tax resident during 2021-2022 as I only left for about 90 days, and hence lived in the UK for more than 183 days. Also, as I went away and came back during the same year, I'm not eligible for a split year, according to my understanding (maybe it is the part that wasn't clear in my first query - I'm back in the UK now). It seems pretty straight forward to me that I was a tax resident for 2021-2022, am I missing anything? Anyway, my question is about tax relief for rent and utilities for the 3 months I was abroad - do I need to collect and calculate all my accomodations? (hostels, Airbnbs and such) Or can I just treat it as I continued to pay regular rent and bills in the UK? (I continued working remotely as always during this period abroad.) Thanks, Asaf

Just to clarify, I'm referring to the "work from home allowance" as self employed.

Hi asafm7,

Please note that you can only claim travel and accomodation expenses incurred 'wholly, exclusively and necessarily' in carrying out the duties of your self-employment (ie essential business trips).
The travel and accomodation expenses incurred during your three month period as a 'digital  nomad' do not appear to fall into the 'wholly, exlusively and necessarilly' category, because it was a matter of choice that you travelled to and stayed in various locations, rather than working from home.
Please also note that you would not be able to claim 'working from home' expenses for periods when you were not in fact working from home.

Thank you.

Thanks. These places were my home during this period. I had no other home, so without these places I was homeless. Why can't it be considered as short term rents? I understand it isn't a standard situation, but there must be a better way of dealing with it, as digital nomading becomes more popular. According to your reply, digital nomads have no homes, and no accomodation expenses for maintaining their business - and that is obviously not true... Thanks, Asaf

Hi asafm7,

When you originally posted on this forum, you described your situation as follows: "During the year I left my apartment for 3 months (stopped paying rent and bills) and lived as a digital nomad". It was on that basis -  ie that you had voluntarily vacated your apartment for three months to live and work as a 'digital nomad' -  that the previous answer was provided.

If in fact you had no home during the 3-month nomadic period, other than the temporary accomodation you rented, you would be regarded as an 'itinerant employee' . The HMRC guidance at EIM31817 outlines HMRC's position re: itinerant employees with the following example:  

'An employee performs the duties of her employment at a series of temporary workplaces. She has no permanent home. She stays in guest houses and hotels near wherever she happens to be working. This is the only accommodation available to her. She has to live somewhere and the costs of accommodation are attributable to her general need for shelter, rather than her attendance at a particular workplace. Her travel is between her temporary accommodation and her temporary workplace. The cost of accommodation is not attributable to the cost of that travel so she is not entitled to a deduction for the cost of the accommodation.However she is entitled to a deduction for the cost of travel between her temporary accommodation and her temporary workplace.This is an example of an itinerant employee who has no permanent home and makes her home wherever her work happens to take her. She cannot deduct the cost of her accommodation because she incurs no additional expense.'    

EIM31817 - Travel expenses: general: accommodation and subsistence: subsistence costs that are not attributable to the travel: no permanent home: examples  

Thank you.                    

Thank you for your reply. I believe there is a difference between the example and my case. In the example, she didn't work in her accommodation. She worked in a separate workplace. This is why it makes sense she cannot deduct her accommodation. I did work in my accomodations. I used it as an office, exactly as I would have if I stayed in my apartment. It was my home, and worked from it. Hence, I worked from home. The example you shared is mentioned in the context of travel. I think my case is better viewed as a period in which moved many homes. I of course not talking about deducting the whole cost of my accomodations, just a relative part that was used for working. Please let me know if I'm correct about the difference between the example and my case - she didn't work from her accommodation, I did. Thanks again, Asaf

Hi,

If the various residences you rented during your 3-month stint as a 'digital nomad' meet HMRC's definition of what constitutes a home, then you can claim 'working from home' expenses. For the residences to be regarded as homes, the conditions at EIM32760 would have to be met. As defined in the HMRC Residence Manual, for a residence to be regarded as a home,  it has to be a place that 'an individual uses with a sufficient degree of permanence and stability to count as a home'.

In your particular circumstances, you would also have to consider what happened after the 3-month nomadic period. Did you return to the apartment you mentioned previously? Was the apartment your actual home throughout?                                

EIM32760 - Other expenses: home: working from home

Thank you.

Thank you for your reply. I believe a nomadic life doesn't fit the definition of "permanence and stability". Maybe we can look at this in another way: If, during my travels, I were to rent working spaces, I believe I could have claimed it as a business expense? If so, I can claim that part of the accommodations I rented was used as a working space (as it was). So I basically rented accommodation and working space together and am asking for relief for the working space part of my expenses. Regarding your question, before these 3 months, I left my apartment in the UK, ended the lease, and stopped paying rent. By chance, the apartment was available when I got back, and I re-entered it under a new lease. Does it impact the case?

This thread was exactly what I was looking for. can I ask a question? I left UK for about 30 days and came back. Does these rules apply to me too? where can I find more information?? I am working from home as well.

Hi
 

ervinjason,   Please see guidance surrounding this query : Employment Income Manual    . Thank you.

Hello, What about my original query? Attached again: *** I believe a nomadic life doesn't fit the definition of "permanence and stability". Maybe we can look at this in another way: If, during my travels, I were to rent working spaces, I believe I could have claimed it as a business expense? If so, I can claim that part of the accommodations I rented was used as a working space (as it was). So I basically rented accommodation and working space together and am asking for relief for the working space part of my expenses. Regarding your question, before these 3 months, I left my apartment in the UK, ended the lease, and stopped paying rent. By chance, the apartment was available when I got back, and I re-entered it under a new lease. Does it impact the case? *** Thanks, Asaf

Hi asafm7,

Please refer to S34 paragraph (2) Ittoia 2005.
If you believe the expenses incurred meet that criteria then a claim can be made.
If you want more guidance then you would need to write in with full details relating to the 3 month period and what happened to any personal items when they left the apartment.
Income Tax (Trading and Other Income) Act 2005 (legislation.gov.uk)

Thank you.

I'm not hmrc but may be able to provide enough to point you in the right direction. Are you employed or self employed? You haven't said and it could make a difference. What was the reason you lived as a digital nomad for 3 months? What sort of work did you do from home/the hotels? If you were travelling for personal purposes (not because it was required by your employment), then no tax relief will be allowable. If you're an employee, the question is always going to be if the expense is necessary for you to perform your job, why isn't your employer paying it? Not an official criteria but the answer can help determine whether it's a necessary expense or a choice.

I understand[.](https://alightmotionapk.co/) I believe I need to be in touch with a lawyer to understand it thoroughly.

Thanks . I'm a self employed web developer. I'm sorry I forgot to mention it. In this case, if part of the accommodation I rented used for working, shouldn't I be able to claim this part as a business expense? Thanks.

Hi asafm7,

Please refer to S34 paragraph (2) Ittoia 2005:

34Expenses not wholly and exclusively for trade and unconnected losses

If you believe the expenses incurred meet that criteria then a claim can be made.

If you require more guidance then you would need to write to us with full details relating to the 3 month period and what happened to any personal items when they left the apartment.

Income Tax (Trading and Other Income) Act 2005

Thank you.

Hi asafm7

You can see the list of allowable expenses here:

Expenses if you're self-employed

Thank you.