In the UK longer than you planned? COVID-19 and the Statutory Residence Test

03 April 2020

Freedom of movement between countries remains heavily restricted due to COVID-19.

For some international individuals stuck in the UK, this may push them over a time threshold used for the purposes of determining their residence for tax purposes and could mean they must pay more tax.

What is the test?

You may already be familiar with the concept of the Statutory Residence Test (SRT) which considers a number of factors to conclude whether or not you are resident in the UK in a particular tax year. The key factor is the number of days spent in the UK in that tax year. If the number of days is between 16 and 183 days, other factors such as the location of your main residence, your work and the ties you have to the UK must also be considered.

Unexpected days in the UK are likely to be unwelcome for international individuals for whom UK tax residence would mean a much higher UK tax bill.

If you’re forced to remain in the UK, what can you do?

Legislation allows you to claim that exceptional circumstances beyond your control have caused you to stay in the UK longer than would have would otherwise have done. If you can demonstrate this, you can claim that up to a maximum of 60 days per tax year should be disregarded for the purposes of the SRT.

Exceptional circumstances can include births, deaths, sudden and life-threatening illness or injury; the legislation also refers to 'national or local emergencies such as war, civil unrest or natural disasters'. If these events happen to you, your spouse or your dependent child, HMRC will generally allow a certain amount of disregard. Illness of others is more of a grey area. HMRC will be concerned with a lack of choice as to whether to remain in the UK.

Is COVID-19 an exceptional circumstance?

Each case will of course turn on its own facts and circumstances.

HMRC guidance confirms that if you:

  1. are quarantined or advised by a health professional or public health guidance to self-isolate in the UK as a result of the virus
  2. find yourself advised by official Government advice not to travel from the UK as a result of the virus
  3. are unable to leave the UK as a result of the closure of international borders; or
  4. are asked by your employer to return to the UK temporarily as a result of the virus

the circumstances are considered as exceptional.

The impact of the virus and guidance in response are changing rapidly so advice should be regularly reviewed.

What should I do now?

From a practical point of view, keeping a record of the reasons you could not leave the UK together with any evidence as to these reasons and the dates on which this applied will assist to alleviate any difficulties encountered long after the event.

You must fully intend to leave the UK as soon as you can and do so without delay as soon as the restrictions are lifted.

Care should be taken not to use your time in the UK in a way which may prevent the concession from being claimed, for example, by working more than three hours per day.

Whilst you can contact your professional advisors to update them on your circumstances, you can seek specific advice by getting in touch with our Private Client Team.

The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at April 2020.