Overseas Workday Relief
Overseas Workday Relief takes the part of your employment income relating to duties performed outside the UK out of UK tax, for qualifying employees in their first 4 years of UK residence. Since 6 April 2025 it is capped at the lower of 30% of your qualifying employment income or £300,000 a year, and the earnings no longer need to be kept in an overseas account.
Three things changed at once in April 2025, and each of them makes older advice wrong in a different direction: the period got longer, a cap appeared, and the offshore account requirement disappeared.
What the 2025 reform changed
| Before 6 April 2025 | Now | |
|---|---|---|
| Period | 3 years | 4 years |
| Cap | None | the lower of 30% of your qualifying employment income or £300,000 a year |
| Where earnings are paid | Had to be kept offshore | UK account is fine |
| Basis of eligibility | Domicile | Residence, alongside the FIG regime |
Two of those changes help and one does not. For most employees the end of the offshore requirement is the significant one — it removed a bank account, a set of mixed-fund rules, and a compliance burden that regularly cost more to administer than the relief was worth. For high earners, the cap is a real restriction that did not exist before.
The workday record
The relief is apportioned by working days: what share of your duties were performed outside the UK. That proportion is the whole calculation, and it is only as good as your record of it.
Keep it contemporaneously — a calendar entry per working day, with the country. Boarding passes and hotel bookings corroborate it. What does not work is reconstructing a year of travel from memory when the return is being prepared, because that is precisely the number HMRC will ask about if it asks about anything.
Working across borders in your first UK years?
Tell us where you work and for whom. We will tell you whether the relief applies, what the cap means for your income level, and what records to start keeping now — which is worth more than any advice given afterwards.
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Free assessment first. If there is work to do, you get a fixed quote in writing before anything starts.
How it fits with everything else
- The FIG regime covers foreign income and gains, but not employment earnings. OWR is the employment counterpart, on the same four-year clock.
- Residence comes first: OWR only matters once you are UK resident, and only in the early years.
- Split-year treatment may deal with the period before you arrived, which is a different question from duties performed abroad afterwards.
These interact, and the sequence matters. Establish residence, then the split year, then decide about FIG and OWR for the resident part — doing it in any other order produces answers to the wrong questions.
Questions people ask
What is Overseas Workday Relief?
Relief from UK tax on the part of your employment income that relates to duties performed outside the UK, for qualifying employees in their early years of UK residence. It is claimed on the return, not applied by your employer.
How long does it last now?
4 years, extended from three at 6 April 2025 to line up with the FIG regime. Guidance still describing a three-year period predates the reform.
Is there a limit?
Yes, and this is new: the relief is capped each year at the lower of 30% of your qualifying employment income or £300,000 a year. Before the reform there was no such cap, which makes older worked examples misleading for high earners.
Do I still have to keep the money offshore?
No. Since 6 April 2025 the earnings no longer have to be kept in an overseas account — they can be paid into a UK one without affecting the relief. This removed the single most awkward part of the old regime — the offshore account, the mixed-fund problems, and the record-keeping that went with them.
How is the split between UK and overseas duties worked out?
Broadly by workdays: the proportion of your working days spent performing duties outside the UK. Which makes a contemporaneous record of where you worked each day the single most valuable document you can keep — reconstructing it from memory two years later rarely survives scrutiny.
Does it apply to bonuses paid after I stop qualifying?
Income can relate to an earlier period even when it is paid later, and there are specific rules for that trailing income. It is worth getting the treatment right rather than assuming the payment date decides it.
Figures are for the tax year shown and change every April. They are general information, not advice — we check the current position for your circumstances before anything is filed.
Reviewed 19 October 2026.
Part of our work on uk residence and foreign income — if you want someone to take it off your hands, start with our your first UK tax year page.