Coping with Covid 19 ~ Statutory Residence Test

With most commercial flights now postponed for the foreseeable future, HMRC have published guidance on when extended stays in the UK due to COVID-19 can be ignored for the purposes of the day-count under the Statutory Residence Test (“SRT”).

Unable to leave the UK due to Covid 19

Individuals will be automatically resident in the UK if they spend at least 183 days in the UK in a tax year.  However, the SRT provides that a day does not count if due to “exceptional circumstances” and HMRC have now given details of certain categories of individual who would benefit from this rule in the present circumstances.  They are as follows:

·        an individual is put under quarantine as a result of the virus

·         an individual is advised by a health professional or public health guidance to self-isolate in the UK because of Coronavirus

·         official Government advice is not to travel from the UK as a result of Coronavirus

·         an individual is not able to leave the UK because international borders are closed

·         an individual is requested to return to the UK by their employer because of Coronavirus

The guidance does not cover all situations, for example if you are caring for someone self-isolating, or if you are detained overseas and fail to get enough days in the UK to remain UK tax resident when this is to your advantage or indeed an absolute necessity to avoid a tax charge arising.

Looking to the future

This guidance does not however deal with every situation where the taxpayer concerned stays in the UK due to coronavirus and HMRC continue to stress that each taxpayer’s case must depend on their particular facts and circumstances.  Each case will therefore be dealt with individually.  Taxpayers affected should therefore compile and retain as much supporting evidence as possible as the HMRC statement does not release all taxpayers from any day counting concerns.