The rules regarding UK residency and UK tax position are not straightforward and we recommend that this is carefully reviewed to ensure your peace of mind.
As well as the usual regulations, HM Revenue & Customs’ rules include a 60 day “exceptional circumstance” get out clause. However, this may not be as useful as might be expected for 2020/21 and the Covid-19 pandemics.
To qualify for the concession an event must:
- Be beyond your control – HM Revenue & Customs suggests such events as civil unrest, natural disasters, and the outbreak of war
- Occur whilst you are in the UK – this seems to rule out the availability of the concession if, for example, you decide to see out the pandemic in the UK rather than your usual country of residence
- You must leave the UK as soon as possible after the event occurs
- Not exceed 60 days
- There is serious or life-threatening illness to yourself, your spouse or civil partner or minor children. Returning to the UK to be at the death bed of a parent is unlikely to be covered.
However, with specific reference to Covid-19 H M Revenue & Customs has indicated that the following circumstances may qualify for exceptional circumstances treatment, if you are in the UK when the event occurs:
- 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 and/or
- Find yourself advised by official Government advice not to travel from the UK as a result of the virus and /or
- Unable to leave the UK as a result of the closure of international borders and /or
- Are asked by your employer to return to the UK temporarily as a result of the virus.
Nothing is definite though. Each individual’s circumstance will be judged on its own merits.
For most people, it is the 2020/21 tax year that will be affected. This means that there may be time to prepare for a worst-case scenario of a UK tax liability due for payment in January 2022.
We strongly recommend that anyone who is concerned about their UK tax residency position, gets in touch with us as soon as possible so that the situation can be reviewed.
We are contacting clients whom we think may be affected, but please get in touch with us as appropriate.
You may also be interested to read a related article we wrote on this topic.