HMRC Guidance on COVID-19 and UK Residency

Tax Impact of COVID-19 on the Global Workforce

As we see many more shut-downs, lock-downs and isolation of our countries and public one has to wonder how this affects the globally mobile workforce from a tax perspective? Many of our clients, both employers and employees are asking what the tax impact of travel restrictions and potential lock-downs will mean for their workers who remain in the UK longer than expected. The UK Statutory Residence Test (SRT) says that if you are present in the UK at midnight then that day will be counted as a day of presence for determining UK residency.

However, there are certain situations that can be considered ‘exceptional circumstances’ where HMRC will allow these days to be disregarded and discounted towards the SRT. Current Rules for Exceptional Circumstances The current rules permit a person to exclude up to 60 days of presence in the UK during one tax year that meet the criteria for exceptional circumstances and the following apply:

  • You would not ordinarily have been present in the UK at the end of the day but are prevented from leaving due to the exceptional circumstances; and,
  • You intend to leave the UK as soon as those circumstances permit.

New HMRC Rules including COVID-19

HMRC now has released guidance on how COVID-19 will affect the SRT, a person’s residency in the UK and how the outbreak could be considered ‘exceptional circumstances.

HMRC Guidance states that in order to disregard days of presence counted towards the SRT as ‘exceptional circumstances’ under the circumstances of the COVID-19 pandemic any of the following must apply:

  • You must be quarantined or advised by a health-professionals to self-isolate in the UK as a result of COVID-19;
  • You are in a lockdown situation as a result of the virus;
  • You are unable to leave the UK due to the shut-down of International borders; or,
  • Your employer asks you to return to the UK temporarily as a result of the virus.

Consult With A Tax Professional

Of course the rules are much more complex than this beneath the surface. If you think that the rules may apply to you or your employees then please contact S.E. Tax Professionals to discuss your situation with a tax professional.

Skip to content