Overseas workday relief and the workday record

Overseas workday relief takes an employee who is UK resident and taxable on worldwide earnings, and removes from the UK charge the portion of those earnings that relates to duties performed outside the United Kingdom. It is one of the more valuable reliefs available to an internationally mobile employee, and one of the most frequently lost — not because the conditions fail, but because the record needed to support the apportionment was never kept.

The relief is a fraction. The numerator is a count of overseas workdays. If you cannot evidence the count, there is no relief to claim, however plainly true it is that you spent half the year working in Frankfurt.

What changed in April 2025

The old relief was tied to non-domiciled status and the remittance basis. It required the employee to be non-UK domiciled, to claim the remittance basis, and — in practice — to run a segregated offshore account into which the overseas earnings were paid and out of which nothing was remitted. The account structuring was elaborate and the accidental remittance was a standing hazard.

That apparatus is gone. Eligibility now follows the four-year foreign income and gains regime: an employee who becomes UK resident after a long enough period of non-residence can claim overseas workday relief for the same first four tax years of UK residence. Domicile is irrelevant. The earnings do not need to be kept offshore, and can be brought into the UK freely.

In exchange, the relief acquired a ceiling it did not have before.

Relief is limited each tax year to the lower of 30% of the employee’s qualifying employment income and £300,000. The cap applies year by year and is not carried forward.

The net effect is a relief that is far easier to operate and rather harder to maximise. What it is not is easier to evidence.

Who can claim

Three conditions have to hold together.

You are UK resident for the tax year, determined by the Statutory Residence Test. Non-residents do not need the relief, because earnings for overseas duties are outside the UK charge anyway.

You are within the four-year window. The eligibility test is the same consecutive non-residence condition that governs the FIG regime, tested through the SRT across the preceding decade. A single resident year inside that period, including a split year, breaks the run.

Some duties of the employment are performed outside the UK. The employment can be with a UK employer or an overseas one. What matters is where the work was physically done.

The apportionment

The statute asks for a just and reasonable attribution of earnings between UK and non-UK duties. In practice that means a workday count.

You establish the total number of qualifying workdays in the tax year, divide them into those on which duties were performed in the UK and those on which duties were performed overseas, and apportion the earnings for the period in that ratio. Bonuses and other amounts relating to an earlier period are apportioned by reference to the workdays of the period they were earned in, which is why a bonus paid in year three can require the workday record from year one.

Three refinements matter.

Duties merely incidental to overseas duties performed in the UK do not turn the day into a UK workday. The exception is narrow — answering routine correspondence while based abroad may qualify; attending a board meeting or meeting a client does not. Substantive duties are never incidental, however brief.

Travel days are split. A day beginning with a morning in a London office and ending with an evening’s work in Zurich has duties performed in both places, and HMRC’s practice accommodates apportioning it rather than forcing it into one column.

Non-working days are excluded, not allocated. Weekends, annual leave and days of no duties do not form part of the count on either side, which means the denominator is workdays rather than calendar days.

Why this is a different record from presence

Here is the distinction the whole relief turns on, and it is worth stating in full.

The Statutory Residence Test asks where you were at midnight. A UK day is a day you were present in the UK at the end of it, and a UK workday for the purposes of the work tie is one on which you did more than three hours of work in the UK.

Overseas workday relief asks where the duties were performed. Midnight is irrelevant. Hours thresholds are irrelevant. What is recorded is the location of the work itself, day by day.

The two records diverge constantly. Fly out of London on a Tuesday evening after a full day in the office and land in Munich before midnight: the SRT records a non-UK day, the relief a day of UK duties. Fly into London at 07:00, work all day, fly out at 22:00: the SRT records no UK day at all, the relief a full UK workday. Duties performed at home in the UK on a nominal overseas assignment are UK duties, regardless of who employs you or where the salary is paid.

For completeness, both counts sit alongside the SRT thresholds that decide residence in the first place: an arriver is automatically non-resident with no more than 45 UK midnight days, the work tie engages above 40 UK workdays, and 183 UK days makes you resident outright.

Three counts, three definitions, one calendar. This is the reason a spreadsheet built for one of them almost never supports the others.

What HMRC expects to see

A workday record that survives enquiry is contemporaneous and granular: the date, the country in which duties were performed, whether the day was a workday at all, and for split days the basis of the split. Corroboration is expected to exist behind it — flight bookings, calendar entries, expense claims, hotel invoices.

What does not survive is a summary produced after the year end from memory and a travel folder. An apportionment is a claim about several hundred individual days, and an examiner testing it will select days at random and ask what happened on them. A schedule that cannot answer that question is usually conceded in full rather than in part, because the deficiency goes to the whole record rather than to particular entries.

Payroll adds a further reason to keep the record as you go. Employers expecting a claim often operate a PAYE arrangement relieving the overseas element through the year rather than by repayment afterwards. Such arrangements are approximations reconciled at year end against the actual workday split, and the reconciliation needs that split to exist.

What Residay tracks

Residay keeps workday location as a distinct dimension from presence, because the two questions are genuinely different and answering one does not answer the other.

Each day carries a country of presence on the UK midnight convention for the SRT, and, where relevant, a record of where the duties of the employment were performed, including split days. Workdays are separated from non-working days, so the denominator of the apportionment is the statutory one. Counts run on the UK tax year. And because the eligibility condition looks back over a decade of residence, the residence history that supports the four-year window is held alongside the current year rather than being reconstructed when the claim is made. The record stays on your device, exportable in the day-by-day form an adviser or an examiner will ask for.

Planning notes

• Decide the workday convention at the start of the year and apply it consistently. A schedule that changes its treatment of travel days mid-year invites the whole basis to be reopened.
• Log the location of duties on the day, not the destination of the flight. They are not the same fact, and it is the former that the relief is computed from.
• Keep the record beyond the year it relates to. Bonuses and deferred awards are apportioned by the workdays of the period in which they were earned.
• Watch the annual cap against the shape of your travel. It does not carry forward, so a heavy overseas year followed by a light one wastes relief that even timing could not recover.