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Why the pandemic may affect your residency status for tax

As countries responded to the coronavirus pandemic and imposed travel restrictions and lockdowns, some people were ‘stuck’ in a territory, unable to return home.

20 July 2020

Under usual circumstances, spending extra days in the UK and breaching UK tax residence could bring a liability to pay UK tax as well as additional reporting requirements. Residency for UK tax is determined by the UK’s Statutory Residence Test.  Its criteria considers the number of days an individual spends in the country during a tax year. 



The criteria does allow exemptions in certain ‘exceptional circumstances’. In March, HMRC confirmed that Covid-19 was deemed an exceptional circumstance if an individual:

  • Was quarantined or advised by a health professional or public health guidance to self-isolate in the UK as a result of the virus
  • Was advised by official government advice not to travel from the UK as a result of the virus
  • Were unable to leave the UK as a result of the closure of international borders, or
  • Were asked by their employer to return to the UK temporarily as a result of the virus.


The 60 days challenge

The current rules, however, only allow for 60 days to be disregarded. This is potentially proving inadequate given the scale of the pandemic. 

Since March, Government guidance has been to avoid all non-essential travel and it has only now started to lift quarantine restrictions for certain countries.

On 9 April 2020 in a letter to the Chair of the Treasury Committee, the Chancellor confirmed that time spent by individuals in the UK between 1 March 2020 and 1 June 2020 working on COVID-19 related activities would not count towards the residence test.  This covered those working in sectors such as healthcare, engineering or R&D.


The importance of professional advice

It is anticipated that HMRC may issue further guidance. In the meantime, non-uk resident individuals who remain in the UK as a result of the UK’s lockdown are encouraged to seek professional advice regarding the latest position in relation to their personal circumstances.


Can we help?

If you think your residency status has been affected by the UK's lockdown, please contact one of our specialist team to discuss your individual circumstances and gain specific guidance.


Specific advice should be obtained before taking action, or refraining from taking action, in relation to this summary, if you would like advice or further information, please speak to your usual Shipleys contact.

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