The discovery of the coronavirus (COVID-19) in the UK is taking its toll on all aspects of life with most people now staying at home in order to minimise the risk of the virus transferring to more of the population. This restriction of movement requires everyone to adjust in light of the circumstances and is having an interesting impact on the rules for UK tax residence.

While tax rules may not be of greatest interest to most people at the moment, they will be important for those people who limit their time in the UK to avoid becoming UK tax resident. Following the implementation of the UK's regime to limit the spread of COVID-19 a number of people who are not UK tax resident may find themselves spending more time here than they would have planned. Her Majesty's Revenue & Customs (HMRC) has issued specific guidance (here), in light of the situation, on what an extended stay in the UK may mean for those who are not currently UK tax resident.

What are the rules on UK tax residency?

The starting point of any discussion on tax residence in the UK is Statutory Residence Test (SRT). The SRT determines whether you are a resident in the UK for tax purposes in a given tax year. The SRT looks at a number of different factors in determining whether you are UK tax resident or not, with the most important factor often being the number of days you spend in the UK over a specified period.

While the number of days spent in the UK is a material factor there is provision in the rules for the number of days you spend in the UK to be reduced due to 'exceptional circumstances'. There is no prescribed list on what constitutes 'exceptional circumstances' but HMRC does make clear in its guidance that such events would be "...out of the ordinary..." and likely include "...local or national emergencies, such as civil unrest, natural disasters, the outbreak of war or a sudden serious or life threatening illness or injury to an individual..."

These are the ground rules on UK tax residency and there are a few key points to note:

  • The maximum number of days spent in the UK in any tax year that may be ignored due to exceptional circumstances is 60.
  • The 'exceptional circumstance' rules normally only apply where someone has no choice concerning the time they spend in the UK.

The applicability of the 'exceptional circumstance' rules tends to be fact specific i.e. what is an exceptional circumstance depends on the situation and choices available.

What does COVID-19 mean for your status as tax resident?

HMRC has issued new guidance, which needs to be read together with the existing rules set out above, on UK tax residence in light of COVID-19.

While it reiterates that whether days spent in the UK can be disregarded as exceptional circumstances is highly fact specific, HMRC has outlined that considering the current situation, the following situations will be considered as exceptional:

  • If 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
  • If you find yourself advised by official Government advice not to travel from the UK as a result of the virus
  • If you are unable to leave the UK as a result of the closure of international borders, or
  • If you are asked by your employer to return to the UK temporarily as a result of the virus

So this is good news, right?

In short, yes. It is always helpful to have clarity in difficult situations (and COVID-19's impact on the UK, and the world at large, could easily be described as such) but HMRC's guidance does raise additional questions, including:

  • Given that the UK is expected to be dealing with COVID-19 for the foreseeable future, is the 60 day limit on days that may be disregarded reasonable in the circumstances?
  • How will these rules be applied to someone who is otherwise free to leave the UK, but who has a dependant (spouse or family member) who falls ill with COVID-19?

These are unusual circumstances and it will take some time for answers to these kinds of questions to be worked through by HMRC. In any event it is important that individuals affected by the tax residency rules engage with their advisors and HMRC, while keeping a detailed record of their movements (or lack thereof).


Kevin Winters


Neil Ritchie

Director of Personal Tax