HorizonUK Tax Solutions

Non-Doms & Inbound

What is Overseas Workday Relief?

Answered by Jordan Onraet-Wells, Founder & Chartered Tax Adviser (CTA). Published 8 August 2026. Last reviewed 8 August 2026.

The short answer

Overseas Workday Relief (OWR) takes the part of your employment income that relates to duties performed outside the UK out of UK tax, for up to four consecutive tax years. Since 6 April 2025 it is tied to the FIG regime: you must be a qualifying new resident, meaning UK resident after at least 10 consecutive tax years of non-UK residence, and the relief is capped each year at the lower of 30% of your qualifying employment income or £300,000. The big improvement over the old rules is that the money no longer has to be paid into or kept in an overseas account. For an internationally mobile executive who travels heavily, OWR is routinely worth tens of thousands of pounds a year, but it takes both an election and a quantified claim on your Self Assessment return.

  • OWR relieves employment income relating to duties carried out outside the UK, normally apportioned on a workday basis between UK and overseas days.
  • From 6 April 2025 it is available to qualifying new residents for up to four consecutive tax years, on the same 10-year non-residence test as the FIG regime.
  • Relief is capped each year at the lower of 30% of qualifying employment income or £300,000, a limit that did not exist under the old rules.
  • Earnings no longer need to be paid into an overseas account: HMRC confirms the relief applies whether income is received in a UK or overseas bank account.
  • It takes an OWR election plus a claim on your Self Assessment return, and an election year costs you the personal allowance and CGT annual exempt amount, the same as other FIG claims.

What the relief does and who gets it

OWR removes UK tax from the slice of your employment package that relates to overseas duties. HMRC's guidance for globally mobile employees confirms it covers earnings and benefits in kind, employment-related securities and options, and third-party employment income, apportioned between UK and overseas duties normally on a workday basis. Someone on £250,000 who works 40% of their days abroad has £100,000 of earnings relating to overseas duties, although the annual cap would limit the relief to £75,000. Since 6 April 2025 eligibility mirrors the FIG regime: you must be a qualifying new resident, which means being UK resident after at least 10 consecutive tax years of non-UK residence, and you keep that status for the following three years of UK residence, giving up to four consecutive years of relief.

What changed on 6 April 2025

The new rules trade restrictions for a cap. Under the pre-2025 regime, OWR depended on the remittance basis and the relieved earnings had to be kept offshore; HMRC now confirms the relief is available whether your income is received in a UK or an overseas bank account, so you can be paid into your ordinary UK current account and spend the money here. In exchange, relief is capped each qualifying year at the lower of 30% of qualifying employment income or £300,000. There are transitional rules too: employees who claimed OWR in 2023/24 or 2024/25 can continue to qualify under transitional provisions, and HMRC confirms relief in those transitional years is not subject to the financial limit. The mechanics and worked examples are in our full guide to the new OWR rules.

How you claim, and the catch

OWR is not automatic. It takes both an election and a claim, made in your Self Assessment return for the qualifying year, with the relieved amounts quantified. Foreign employment earnings sit outside the ordinary FIG foreign income claim on the SA109, so the OWR election is a separate step that self-preparers often miss entirely. And the cost side is identical to other FIG claims: HMRC's manual confirms an OWR election forfeits your personal allowance and CGT annual exempt amount for that year, so the 30% arithmetic and the allowance loss need to be run together before you commit. Travel day records matter as well, because the UK-versus-overseas workday split is the foundation of the whole claim.

OWR returns, prepared by Horizon

OWR sits inside exactly the returns Horizon specialises in. Founder-led by a Chartered Tax Adviser with over 10 years experience, including 7 at a Big Four firm, we build the workday apportionment, apply the 30% or £300,000 cap, make the election and claim on your return and file it with software HMRC's free service cannot match, all on a fixed fee agreed upfront. The first returns under the new rules, for 2025/26, are due by 31 January 2027, so this filing season is when the new OWR gets real. Book a free 30-minute clarity call or see the non-dom and residency service.

Go deeper

Sources and further reading

This is general information for the 2026/27 UK tax year, not personal tax advice; speak to a Chartered Tax Adviser about your own position.

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