I purchased a chinese elm last year in June from the Japanese Garden in Cornwall.
It has been very healthy and has been growing very well until recently.
So many leaves have turned brown and have dropped off, leaves that are still green are also dropping.

I dont think I have changed the watering schedule of my plant, and it's still getting as much sunlight as it has ever had. I place it under a plant light as I live in a thatched cottage so lighting is fairly low and the bonsai grew so well for so long under the light.

I have made a slight cut into the trees trunk and it is still a good green colour so I assume that is a good sign. I have also removed all of the dead leaves and also trimmed the dead branches as they were completely bare. I have been water as usual, misting the plant and have not fed it and fertiliser.

I have also noticed that the moss around the tree (which use to be extremely green) is now a very dark colour and has looked dead for quite a few months now. There is also a strange orange like crust around the edge of the pot which will return even if I clean it all off.

I will provide photos of the tree along with a photo of what it looked like when I first bought it for a comparison.

This species should be outside, it is totally hardy and you can see the problem with having it in a dork environment with too much heat. That is how the plant sees it. I suggest that you put it in a sheltered spot and keep it moist do not put any fertiliser and with luck it will be ok. Do not re pot. You could take the moss off the surface but it will do no harm and may still be alive and will grow again

Thank you for the reply.
I have had this bonsai indoor for a year now and it has been absolutely fine until this last month. It is not near any radiators and has plenty of light from my plant light. I just cannot figure out why it has suddenly lost so many leaves in the last month.

Bethcushing wrote:

I purchased a chinese elm last year

That's not a chinese elm.

So if you have the tree for 1 year. Does it mean you bought it at the end of the winter season last year. So the bonsai was in good condition that winter in greenhouse/seller? You might not be able to reproduce the same effect at home indoor.

This looks like an ilex crenata, or japanese holly.
It is indeed a species that fares much better outside then indoors. If no frost is expected I would keep it outside. Also, take a look at the care page, to get you some direction on what could work: www.bonsaiempire.com/tree-species/japanese-holly

Sorry that is completely my mistake, it is a Japanese Holly, my other is the chinese elm which is why I got confused.
So is my issue just that it is inside? If I move it outside will it recover? I am worried since its going to be going from an average indoor temperature to a very cold climate outdoor as it gets to 3*C at night currently, will this not cause the plant a lot of stress?

A lot of trees will live through a winter indoors and then die in the middle of next year.

They just have to have winter.