Current Government rules and guidance around quarantine and travel restrictions could lead to an individual staying longer in the UK than originally intended – leading to an adverse impact on their tax residence status as a result of the day counting tests under the UK’s statutory residence test (SRT).

Planned changes to the SRT to allow for the COVID-19 situation have now been enacted into UK tax legislation which will alleviate many (but not all) situations that international workers now find themselves in.

Broadly, the amendments mean that days spent in the UK will not count towards certain elements of the day count tests where:

• The day falls within the period 1 March 2020 to 1 June 2020.
• The individual is in the UK as a medical/healthcare professional for purposes connected with the detection, treatment or prevention of coronavirus disease, or for purposes connected with the development or production of medicinal products (including vaccines), devices, equipment or facilities related to the detection, treatment of prevention of coronavirus disease; and
• In the tax year under review (being either 2019/20 or 2020/21) the individual is resident outside the UK.

Unfortunately, this does not provide much comfort for those working outside the medical or research professions.

However, the existing tests provide that where up to 60 days are spent in the UK for ‘exceptional circumstances’ these are disregarded for the purposes of the tests.

Exceptional Circumstances

Under HMRC Guidance (not legislation) there is existing limited relief for situations where days are spent in the UK and the circumstances are considered ‘exceptional’. The SRT consists of a number of days counting tests for specific situations (derived from long standing case law) and HMRC’s detailed guidance outlines which of these specific SRT day-counting tests allow relief for days of ‘exceptional circumstances’. Currently, the relief is not available for a number of the tests. The guidance also explains what circumstances might be considered as ‘exceptional’.

Where relief is available, currently, there is a general limit of 60 days of relief allowed for any circumstance that qualifies as ‘exceptional’. HMRC have confirmed this limit will continue to apply in COVID-19 related cases.

COVID-19 – ‘Exceptional’?

COVID-19 guidance published by HMRC on 19 March confirms that where an individual remains in the UK, this will fall within the ‘exceptional circumstances’ definition where this is due to being:

• Quarantined or advised by a health professional or public health guidance to self-isolate in the UK as a result of the virus.
• Advised by official government not to travel from the UK as a result of the virus.
• Unable to leave the UK as a result of the closure of international borders.
• Asked by your employer to return to the UK temporarily as a result of the virus.