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Global mobility services

UK Statutory Residency Test (SRT) and Covid-19 FAQs

On the 11 August 2020, HM Revenue & Customs (HMRC) published their frequently asked questions (FAQs) for individuals displaced from their normal location due to Coronavirus travel restrictions. 

The FAQs note the exceptional circumstances guidance released by HMRC in March regarding time spent in the UK of up to 60 days as a result of Coronavirus and travel restrictions, which can be applied to certain parts of the Statutory Residence Test (SRT). HMRC have said that the circumstances are considered 'exceptional', for Coronavirus scenarios where you:

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

There are however no new UK relaxations announced in the FAQs in response to requests made to HMRC, examples include extending the 60-day exceptional circumstance limit, the treatment of UK workdays for the SRT and the application of the Employment Income Article of Double Taxation Treaties. Individuals working remotely in the UK will, therefore, have UK workdays for the purposes of SRT and now likely unable to meet the conditions to be considered non-UK resident, particularly if they have been in the UK since March and remain so.

There are some related queries that have also been raised to HMRC and hopefully, further guidance should be issued by HMRC in due course. This includes social security and double taxation relief sourcing and interaction with other countries.

It has also been confirmed by HMRC that there are no changes for individuals who are non-UK domiciled and claim the remittance basis of taxation on employment income under the Overseas Workday Relief rules. As such UK workdays carried out whilst working remotely in the UK will be taxable as the duties are physically carried out in the UK, irrespective of where the remuneration is paid.

The on-going Coronavirus situation is likely to mean that many individuals have more complex UK personal positions than they may have had in the past. In some cases, there will be double taxation to consider with the interaction between their UK position and the country where they may normally work and/or live. A temporary displacement should not alter where an individual is a treaty resident, although individual facts and circumstances will need to be reviewed. There may also be complexities around an individual’s social security position.

These complexities around Coronavirus travel restrictions may apply not just to the typical globally mobile population of employees, but also those who may have become stranded in a location, or for example those who have chosen to stay in, or since go to a location for family reasons, or to remote work from a different location.

For further details, please contact one of the UK global mobility services team:

Claire Avery
T +44 (0)118 955 9124

Heather Smallwood
T +44 (0)1224 925 991

Katy Bond
T +44 020 7728 3002

Discover more tax changes affecting internationally mobile employees.