The Treasury could lose £32billion a year due to high-earners moving abroad as people begin to shift from working at the office to working from home, a study claims.
Highly-paid workers who live abroad will pay their income tax in their country of residence rather than to HMRC.
It may reduce the public purse by a sixth, adding to the economic crisis facing the UK, legal experts warn.
Employees in higher-paying jobs are more likely to be able to work from home, according to official data
New staff mobility, fuelled since the pandemic, also affects where corporate income tax goes and value is created.
There are implications for VAT too and where goods and services are purchased.
Co-lead author Professor Rita de la Feria, chair in tax law at the University of Leeds, explained: 'The acceleration of digitalisation and the spread of remote working internationally as a result of the pandemic poses very significant challenges to personal income taxes.
'New mobile workers are likely to be at top of the income distribution and even a small number could result in significant revenue losses to the UK, of between £6bn and £32bn.
'The likely effect will be a tightening of employment rules, introduction of new tax avoidance rules and increased personal income taxes competition with countries fighting to attract new mobile workers.
'The impact of these labour changes is likely to be more significant in countries like the UK, which relies heavily on income tax especially from a small number of high income - and now potentially mobile - taxpayers.
'How big these challenges are, and how countries will react to them, will be a key issue in the coming years.'
Employees in higher-paying jobs are more likely to be able to work from home, according to official data.
This included chief executives and senior officials, whose average earnings were £44.08 an hour, and legal professionals at £39.48 per hour.
Marketing and sales directors were also likely to work from home with a median earning of £37 an hour.
A total of £187 billion of income tax was paid in 2018-19 - with the bulk being met by high earners.
Over a third (35%) came from 4.2 million higher ratepayers and 31% from additional rate taxpayers.
Co-lead author Professor Rita de la Feria said the crisis has the potential for much wider economic and societal ramifications
An estimated 31 per cent of UK jobs can be carried out remotely - of which an as-yet-unknown share will be internationally mobile.
Only higher and additional rate taxpayers are likely to be internationally mobile.
The potential loss in income tax would be between two and ten per cent of the total revenue - £3.8bn to £19bn a year.
Including annual Social Security contribution losses of £2.7bn to £13bn a the total income tax loss would amount to £6.5 bn to £32.5 bn.
Global tax discussions have focussed on solving challenges to corporation tax posed by digitalisation.
But the pandemic-led shift to remote working could pose an even bigger crisis, said the researchers.
Prof de la Feria added: 'This crisis has the potential for much wider economic and societal ramifications than the challenges to corporation tax.
'The challenges of adapting our tax systems to a digital economy are far from over - indeed, they have just started.'
The findings in the British Tax Review back an analysis by the Office for National Statistics (ONS) last year.
It found people who earn higher hourly wages were more likely to be able to work remotely during the pandemic.
The ONS looked at how adaptable jobs are to remote working based on various factors.
These included whether the job has to be carried out in a specific location; the amount of face-to-face interaction with others; and whether the role requires physical activity.
The ONS also looked at whether the extent to which digital communication is integrated into the workplace.
It said professional occupations such as economists and actuaries alongside management, technical and administrative jobs were most likely to be done from home.
This was mainly because the roles involved relatively little face-to-face contact, physical activity or the use of tools or equipment.
Earlier this week a controversial Government plan to make working from home a legal right drew a backlash from business leaders.