Is 'Tamen "shi" zai ying guo ma?' a grammatically correct way to express "Are they in Britain?"
No, unlike the English language which needs "to be" to express this, you don't need the copula shi 是 to describe the location of someone or something.

You just use zai 在 (or, for example, 位于) to express this.

Saying 他们是在英国吗 is possible, but the shi in that sentence has a different function: it adds emphasis.