Here is a proposal. First, use a \savebox for the flag since otherwise one would have to nest tikzpictures. For the same reason, I use Ulrike Fischer's trick to process the characters. In principle, his is also possible with text effects that come with the decorations.text library, but my attempts always had some nesting of tikzpictures involved.
\documentclass[margin=1cm]{standalone}
\usepackage{tikz}
\usetikzlibrary{fadings}
\usepackage{contour}
\contourlength{0.3pt}
\usepackage{calc}
\renewcommand*\sfdefault{ugq}
\usepackage[T1]{fontenc}
\usepackage{soul}
\newsavebox\England
\newlength{\barwidth}
\newcommand{\flagratio}[1]{\gdef\flrat{#1}\setlength{\barwidth}{\flrat pt*100/3}}
\definecolor[named]{EnglishRed}{RGB}{207, 8, 31}
\newcommand{\england}[1][.5]{\flagratio{1.667}\tikz[baseline={(0pt,25pt)},scale=#1]{
\draw[rectangle] (0pt,0pt) -- (0pt,100pt) -- (100pt*\flrat,100pt) -- (100pt*\flrat,0pt) -- cycle;
\draw[line width=20pt*#1,EnglishRed] (0pt,50pt) -- (100pt*\flrat,50pt);
\draw[line width=20pt*#1,EnglishRed] (50pt*\flrat,0pt) -- (50pt*\flrat,100pt);}}
\sbox\England{\england[1]}
\newcommand{\PlaceCharOverEnglandFlag}[2][20]{%
\begin{tikzfadingfrompicture}[name=temp]
\node[transparent!0,scale=#1]
{\contour{black}{\bfseries\sffamily \textcolor{white}{#2}}};
\end{tikzfadingfrompicture}%
\tikz[baseline=(X.base)]{\node[inner sep=0pt,outer sep=0pt,scale=#1] (X) {\contour{black}{\bfseries\sffamily
\textcolor{white}{#2}}};
\path[path fading=temp,fit fading=false,overlay] node {\usebox\England};}%
}
\makeatletter % from https://tex.stackexchange.com/a/2709/121799
\def\SOUL@soeverytoken{%
\PlaceCharOverEnglandFlag{\the\SOUL@token}}
\makeatother
\begin{document}
\so{It's}\hspace*{2cm}\so{coming}\hspace*{2cm}\so{home!}
\end{document}

EDIT: Just for fun, a version using the above-mentioned text effects. In a first step, for every character a savebox is created, which is then called with the character command trick. Unfortunately, that does not work with special characters like space.
\documentclass[margin=1cm]{standalone}
\usepackage{tikz}
\usetikzlibrary{fadings,decorations.text}
\usepackage{contour}
\contourlength{0.3pt}
\usepackage{calc}
\renewcommand*\sfdefault{ugq}
\usepackage[T1]{fontenc}
\definecolor{SkyBlue}{rgb}{0.00784314,0.32156864,0.61176473}
\definecolor{FireRed}{rgb}{0.86274511,0.11764706,0.20784314}
\newsavebox\Iceland
\sbox\Iceland{\begin{tikzpicture}[scale=0.5]
\fill[SkyBlue] (0,0) rectangle (25,18);
\fill[white] (7,0) rectangle (11,18);
\fill[white] (0,7) rectangle (25,11);
\fill[FireRed] (8,0) rectangle (10,18);
\fill[FireRed] (0,8) rectangle (25,10);
\end{tikzpicture}
}
\newcommand{\PlaceCharOverIcelandFlag}[2][20]{%
\begin{tikzfadingfrompicture}[name=temp]
\node[transparent!0,scale=#1]
{\contour{black}{\bfseries\sffamily \textcolor{white}{#2}}};
\end{tikzfadingfrompicture}%
\tikz[baseline=(X.base)]{\node[inner sep=0pt,outer sep=0pt,scale=#1] (X) {\contour{black}{\bfseries\sffamily
\textcolor{white}{#2}}};
\path[path fading=temp,fit fading=false,overlay] node {\usebox\Iceland};}%
}
% from https://tex.stackexchange.com/a/268979/121799
\newenvironment{glrbox}[1]
{\def\thisbox{#1}\begin{lrbox}{0}}
{\end{lrbox}\global\setbox\thisbox=\box0\relax}
\foreach \X in {a,...,z}
{
\expandafter\newsavebox\csname LetterBox\X\endcsname
\begin{glrbox}{\csname LetterBox\X\endcsname}
\PlaceCharOverIcelandFlag{\X}
\end{glrbox}
}
\foreach \X in {A,...,Z}
{
\expandafter\newsavebox\csname LetterBox\X\endcsname
\begin{glrbox}{\csname LetterBox\X\endcsname}
\PlaceCharOverIcelandFlag{\X}
\end{glrbox}
}
\begin{document}
% ugly, need to use a character, here X, as a space replacement
\sbox\LetterBoxX{\tikz[baseline=(X.base),scale=20]{\node[inner
sep=0pt,text=white,scale=10] (X) {X};}}
\newcommand{\mycommand}[1]{\expandafter\usebox\csname LetterBox#1\endcsname}
\begin{tikzpicture}[decoration={text effects along path,
text={MarmotsXsupportXIceland},
text effects/.cd,
path from text,
every word separator/.style={fill=red!30},
characters={text along path, character command=\mycommand}}]
\path [decorate] (0,0);
\end{tikzpicture}
\end{document}
