A Practical Guide for Location-Independent Workers

Digital nomads enjoy the freedom to work from anywhere in the world, but when it comes to expenses and tax relief, the rules can feel far less flexible.

If you’re running a business, freelancing, or working as a contractor while travelling, it’s important to understand which expenses are genuinely allowable, which are not, and how to stay compliant while maximising tax efficiency.

This guide explains the most common expenses digital nomads can and can’t claim.

The Golden Rule: “Wholly and Exclusively”

To be tax-deductible, an expense must be incurred wholly and exclusively for business purposes.

This is where digital nomads often run into trouble, because travel and living costs are frequently dual-purpose, part business and part personal. HMRC will not allow personal or lifestyle costs to be claimed, even if you’re working while travelling.

Flights & Travel Costs

Claimable:

• Flights taken specifically for business purposes
  • For example, travelling to meet a client
  • Attending a conference, training course, or business event
• Local transport for business activities
  • Taxis, trains, and buses to meetings
• Baggage fees only if directly related to business equipment

Not claimable:

• Flights taken primarily for lifestyle or travel reasons
• “Digital nomad” relocation flights
• Round-the-world or long-term travel where work is incidental

Key tip: If the main reason for the trip is personal travel, the flight cost is not allowable, even if you work while you’re there.

Accommodation: Hotels, Airbnbs & Lodgings

Accommodation costs are one of the most misunderstood areas.

Claimable:

• Short-term accommodation for a temporary business trip
• Hotels or Airbnbs when travelling to:
  • Meet clients
  • Attend events
  • Work away from your normal base temporarily

Not claimable:

• Long-term accommodation that replaces your home
• Monthly rentals abroad used as a lifestyle choice
• “Living costs” while nomading full-time

HMRC view: Once accommodation becomes your normal place of living, it is no longer a business expense, even if you work from there.

Co-Working Spaces & Work Facilities

Claimable:

• Co-working memberships
• Day passes at shared offices
• Business lounges used for work
• Meeting room hire

These are usually straightforward allowable expenses, provided they are genuinely used for business.

Food & Subsistence

Claimable:

• Meals only when travelling for business
• Reasonable subsistence costs during short business trips

Not claimable:

• Everyday food costs while living abroad
• Groceries, restaurants, or coffee as part of normal living
• Meals when not travelling specifically for business

Rule of thumb: If you’d need to eat anyway, it’s probably not claimable.

Tech, Equipment & Digital Tools

Claimable:

• Laptop, monitor, and phone, based on business use
• Headphones, webcams, and accessories
• Cloud software and subscriptions
• VPNs and cybersecurity tools
• Website hosting and platforms

If equipment is used for both personal and business use, only the business percentage is allowable.

Internet & Mobile Costs

Claimable:

• SIM cards or eSIMs used for work
• Internet costs at co-working spaces
• Business proportion of mobile phone bills
• Data plans used for client work

Visas & Immigration Costs

Generally not claimable:

• Digital nomad visas
• Tourist visas
• Residency permits

HMRC usually views these as personal costs, even if they allow you to work legally in another country.

Insurance

Claimable:

• Professional indemnity insurance
• Public liability insurance
• Cyber or business insurance

Not claimable:

• Travel insurance, normally personal
• Health insurance unless clearly business-specific

What About Tax Residency?

This is critical for digital nomads.

• Spending too long abroad does not automatically stop UK tax
• You may still be UK tax resident
• You could create tax obligations in another country
• You may trigger permanent establishment risks

This is where professional advice is essential, especially for long-term or multi-country travel.

Record-Keeping Tips for Digital Nomads

• Keep digital copies of all receipts
• Record the business purpose of travel
• Track dates, locations, and client activities
• Separate personal and business spending wherever possible
• Use a dedicated business bank account

Final Thoughts

Being a digital nomad doesn’t mean everything becomes a business expense.

In most cases:

• Business travel = allowable
• Lifestyle travel = not allowable

Getting this wrong can lead to disallowed expenses, penalties, and unexpected tax bills.

If you’re unsure whether your travel setup is tax-efficient, or even compliant, it’s worth getting tailored advice before HMRC comes asking.