If you’re a UK-based digital nomad family earning money online or looking at travel, there’s a good chance you’ve searched for things like:
- UK tax for digital nomads
- Are travel expenses allowable for bloggers?
- How do digital nomads pay tax in the UK?
- Can I split personal and business expenses?
Here’s why it’s hard as a digital nomad…
Most UK tax rules were designed for people with:
- one job
- one home
- one country
- and a clear divide between work and life
Digital nomad families don’t live like that, and that’s where confusion (and stressful January tax bills) often come from.
That self employed individuals get a better deal than employees when it comes to tax, as long as you prepare yourself accourdingly.
As digital nomads we’ve traveled full time, come home for periods, rented out our house, sold our cars, got massive bills for simple mistakes. Hopefully this blog will stop you making some of the silly ones we did and save you a lot of stress and money.
This guide is written specifically for UK digital nomads, travel bloggers, and location‑independent families who want to understand the system well enough to make calm, legal and informed decisions.
Contents
- How Digital Nomad Families Typically Make Money
- Understanding Expenses (What’s Allowable in the UK?)
- Understanding Profit (Why Your Tax Bill Feels Higher Than Your Lifestyle)
- Income, Profit & Expenses From Your UK Home
- Home Offices & Working From “Life”
- Splitting Personal and Business Expenses (40–60% in the UK)
- Why Tax Bills Don’t Always Rise in Line With Your Income
- Travel, Blogging & “Is This Just a Holiday?”
- Practical Money Tips for UK Digital Nomad Families
- Common UK Digital Nomad Questions
- Disclaimer
- Final Thoughts
How Digital Nomad Families Typically Make Money
One reason taxes can feel confusing for nomads is that income often comes from multiple sources simultaneously.
Most digital nomad families earn through a mix of:
1. Remote Work
2. Digital/Online Businesses
3. Rental Income
1. Remote Work
- Freelancing
- Contract work
- Consulting
- Remote employment
This is often paid:
- monthly or irregularly
- by overseas clients
- into UK bank accounts
From a UK tax perspective, this income is usually still taxable in the UK if you remain UK resident.
Unlike a Job were you get a monthly pay check and your tax get’s paid by your employer, free lance work the onus of tax is on you.
2. Digital Businesses
Although there are traditional business owners, who’s businesses can be run by managers and have enough profit left over to fund a nomadic life, these are very rare in this economy. The most common digital incomes includes:
- blogging
- affiliate marketing
- content creation
- online courses
- coaching and consulting
- digital products
Many families start by documenting their travels, then slowly build income through:
- ads
- affiliate links
- brand partnerships
- digital resources
Most people want to know the best “business model” or “product” to sell or do to make income. The truth is you need to build a business that creates multiple streams of income. the best way to do that is create a base or brand that people come when theu want to achieve somethign specific. To learn more about what yours could be watch this training:
This is exactly how we’ve built A Little More Outdoor — sharing real experiences, lessons learned, and practical guidance for adventurous families.
👉 You’ll find many related guides and personal stories over at alittlemoreoutdoor.com, including detailed posts on travel blogging expenses in the UK, family digital nomad income ideas, and how to build flexible online income streams.
This training is the best way to understand how to build the right business for you.
3. Rental Income
Some nomad families fund travel by:
- Renting out their UK home
- Airbnb‑ing their property
- renting a room while abroad
This creates a separate stream of taxable income, which often surprises people — especially when it increases total tax, National Insurance, or student loan repayments.
Understanding Expenses (What’s Allowable in the UK?)
In the UK, an expense is usually allowable if it is:
Wholly and exclusively for the purpose of your business
For digital nomad families, the challenge is that many costs are mixed.
Travel, accommodation, internet, phones, and workspace often support both:
- earning income
- and family life
The biggest misunderstanding is believing expenses must be:
- 100% business
- or 100% personal
In reality, many costs can be partially allowable.
Understanding Profit (Why Your Tax Bill Feels Higher Than Your Lifestyle)
Profit is not:
- All the money you’ve earned.
or - The money you’ve saved.
Profit is: Income minus allowable expenses
For example if you earned a total of £50,000 from diffrent incomes you pay a round 20% tax (so £10,000 anything over £50k gets 40% tax)
however:
If you spent £25,000 on “allowable expences” you only pay tax on the remaining £25k ( so £5k)
You also get just over £12,570 in personal income allowance (£12k you don’t pay tax on). If you are running the business as say a husband and wife, your combined £12, 570 (£25, 140) means you might not pay any tax.
We cover that in more detail here: (https://alittlemoreoutdoor.com/2024/10/29/do-you-need-a-ltd-company-for-your-online-business/)
But simple clerical errors mean the diffrence between £10k or maybe even money back if you’ve been paying tax else where like a job.
This means:
- Disallowed expenses increase profit
- Profit increases tax
- Even apparent “simple living” can trigger high bills
This is why many UK digital nomads say:
“We earn well, but it doesn’t feel like it.”
Income, Profit & Expenses From Your UK Home
For many digital nomad families, the family home doesn’t disappear — it just changes role.
It might become:
- a rental property
- an Airbnb
- a part‑time base
- or an asset you later sell
Each option has different UK tax implications.
Renting Out Your Home While Travelling
Rental income is usually taxable in the UK.
What matters is profit, not rent received.
Allowable expenses may include:
- letting agent fees
- repairs and maintenance
- insurance
- safety certificates
- mortgage interest (subject to current UK rules)
Even if rent only covers the mortgage, tax may still be due.
Airbnb & Short‑Term Lets
Short‑term lets often:
- feel informal
- generate irregular income
- create admin
But from HMRC’s perspective, this is still taxable income.
Some properties qualify for specific reliefs, but rules are detailed and change frequently.
Selling Your Home (Capital Gains Tax)
If you sell a property that:
- was rented out
- or wasn’t always your main residence
You may face Capital Gains Tax (CGT).
Time lived in the property and time rented are treated differently, which is why planning before selling matters.
Returning Home Part‑Time
Many nomad families:
- travel seasonally
- return to the UK for part of the year
- Split time between countries
This can affect:
- main residence status
- allowable expenses
- future CGT calculations
Consistency matters more than perfection.
Home Offices & Working From “Life”
If you:
- plan content
- edit photos or video
- manage emails
- run ads
- handle admin
…then part of your living space supports the business.
This can justify a reasonable proportion of:
- internet
- phone
- workspace – heating
- equipment
Splitting Personal and Business Expenses (40–60% in the UK)
This is one of the most searched UK nomad questions:
Can I split personal and business expenses?
Yes — apportionment is normal.
What HMRC looks for:
- reasonableness
- logic
- consistency
Not perfection.
Commonly split expenses
- Internet
- Mobile phones
- Utilities
- Workspace
- Vehicles or fuel
A 40–60% or 50–50 split is common when expenses are genuinely mixed.
Milage
If you use a vehicle for your business and make specfic trip i.e. to film content or drive to an interview, you can claim 45p per mile for fuel, wear and tear. This means you don’t have to have vehicle that is purely for the business which you are not allowed to use for personal use.
Use Xero to Track and Split Income and Expenses
Trying to keep track of all this manually is stressful.
Accounting tools like Xero connect to your bank account and recognise when you are driving, and automaticly track all your income and out goings.
You can:
- Seprate personal and business expeneses
- Create rules
- Apply percentage splits automatically
- Keep records consistent
- Reduce year‑end panic
- Get a end of year tax estimate.
- Automaticly Track Milage
Xero creates a full accounts without having to carry a bag of recipts with you. we still give those to an accountant to make sure we are doing things correctly.
UK accountants who understand digital nomads, online businesses, and location-independent families. A specialist accountant can help with:
- expense apportionment
- spouse payments
- rental income
- payments on account
(We only recommend accountants who understand this lifestyle — affiliate links may be included where appropriate.)
If you’re still at the income-building stage, platforms like LaunchYou.com can help families explore ethical online business models, skill development, and realistic income paths before worrying about optimisation.
Travel, Blogging & “Is This Just a Holiday?”
A useful test is:
Did the business create the trip — or did the trip happen anyway?
Stronger claims include:
- destination research
- content creation
- accommodation reviews
- family travel guides
Weaker claims:
- general holidays with minimal output
Make sure when you claim these expenses they are appropriately labled, i.e. “destination review” not “holiday”, and ideally include a link to evidence like a related blog.
Why Tax Bills Don’t Always Rise in Line With Your Income
It’s easy to assume that if your income goes up, your tax bill simply goes up by the same amount.
In reality, tax bills don’t always rise in unison with income — and this is where many digital nomad families get caught out. We’ve had years we’re we earned
There are three common reasons this happens in the UK.
1️⃣ Payments on Account
2️⃣ Changes to Allowable Expenses
3️⃣ Other Taxes Triggered at Certain Thresholds
1️⃣ Payments on Account
Under the UK self‑assessment system, HMRC often asks you to make payments on account.
This means:
- You pay the tax due for the year just ended, and
- You prepay 1/2 of the following year’s tax in jan and another 1/2 in july.
If your income has risen, HMRC assumes you’ll earn at least the same again next year.
The result?
- a larger January bill
- even if your income hasn’t increased again yet
This is why families often say:
“Nothing changed — but January suddenly hurt.”
2️⃣ Changes to Allowable Expenses
Tax is calculated on profit, not income.
So if:
- You earn roughly the same
- But fewer expenses are allowable
- Previously split expenses are reduced or removed
Your profit increases on paper, even if your real lifestyle hasn’t changed.
This can happen when:
- Travel patterns change
- Content output drops
- Home use changes
- Mixed expenses are reassessed
- HMRC tax laws change
The result is a higher tax bill, without feeling like you earned more.
3️⃣ Other Taxes Triggered at Certain Thresholds
Income tax isn’t the only thing that rises as income grows.
Crossing certain thresholds can trigger:
- Higher Class 4 National Insurance
- increased student loan repayments
- reduced allowances or reliefs
This means:
- £1 of extra profit can sometimes cost far more than expected
- especially when multiple deductions stack together
This is one reason why families are often surprised by how much of an increase they actually keep.
So for example you think you have £25k profit meaning £5k tax but….
You hit Payments on Acounts threshold so:
-£5k + £2.5k payments on account = £7.5k
– hits a theshold for National insurance and student loan repayments means a around £1k for each.
you could be expecting a £5k tax bill and get one close to £10k
The Key Takeaway
As income rises, tax liability usually rises too, but not always smoothly or predictably.
Understanding these three factors helps digital nomad families:
- plan cash flow more realistically
- avoid January shocks
- and make calmer decisions as income grows
Practical Money Tips for UK Digital Nomad Families
Put 20% Aside
Setting aside 20% of income helps cushion:
- income tax
- National Insurance
- student loan repayments
This is hard when you feel like you are doing your best just to survive. When we first started our business i was still working a job and paying tax. We made a loss with the business an ended up getting a tax rebate in January. we didn’t bother logging Keri’s.
So make sure you start tracking expenses asap.
However as our business grew we thought we had it covered but we got a nasty suprise, including a lot of our expenses not covered. Meals out for example I thought they fell into a certain catogory for our whole family, so i thought I had a handle on my expected tax. having logged it wrong (we needed to put Keri’s expences on a seperate tax return) we ended up paying a whole lot more.
Remember, It’s Not Just Income Tax
Budget for:
- Class 2 & Class 4 National Insurance
- student loans
- rental tax
Review in short burts.
Small, regular reviews beat January panic. you can get Xero to remind you to review you your spends and trips weekly.
Common UK Digital Nomad Questions
- Do digital nomads pay UK tax?
- Are travel expenses allowable for bloggers?
- Can I pay my spouse for helping in the business?
- Should I be a sole trader, partnership, or Ltd company?
You’re not doing anything unusual — you’re just living differently.
Disclaimer
We’re not accountants or financial advisers.
This article is based on personal experience and common UK discussions among digital nomad families.
Tax rules vary by situation and change regularly.
Always seek professional advice for your circumstances.
FAQ: UK Digital Nomad Money & Tax Questions
Do digital nomads have to pay UK tax?
If you remain UK tax resident, you usually still need to declare worldwide income.
Are travel expenses allowable for UK bloggers?
Sometimes, especially when travel is required to create income-generating content. Mixed-use expenses may need to be split.
Can I split personal and business expenses in the UK?
Yes. HMRC allows reasonable apportionment where costs are genuinely mixed.
Can I pay my spouse for helping in the business?
In many cases, yes — if the work is real, the pay is reasonable, and it’s properly recorded.
Why is my January tax bill so high?
Payments on account, rising profits, and disallowed expenses are common causes.
Supporting Guides You May Find Helpful
To keep this page readable, we’ve created deeper guides on specific topics:
- Travel Blogging Expenses in the UK – what’s allowable, what’s split, and what’s usually disallowed
- How Digital Nomad Families Make Money Online – remote work, digital businesses, and realistic timelines
- UK Tax for Location-Independent Families – residency, self-assessment, and common mistakes
- Paying Your Spouse in a Family Business (UK) – what to know before you do
You’ll find these guides linked across alittlemoreoutdoor.com as part of our Escape Plan content.
Final Thoughts
UK digital nomad families aren’t trying to avoid tax.
They’re trying to understand a system that wasn’t designed for flexible, family‑led lives.
Clarity creates calm — and calm leads to better decisions.
For more real‑world guidance, stories, and tools for adventurous families, explore alittlemoreoutdoor.com.
