Tax Talk: UK Residence – Exceptional days in the UK due to Coronavirus

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With the effects of Coronavirus (COVID-19) causing the cancellation of many flights along with the closure of several international borders, individuals can find their travel options severely restricted which can have unexpected consequences for their UK tax position. HM Revenue & Customs (HMRC) has recently updated their Statutory Residence Test (SRT) guidance regarding the impact the COVID-19 pandemic may have on an individual’s ability to move freely to and from the UK, or where they have been required to remain unexpectedly in the UK.

Under the SRT an individual’s UK residence status is often determined by the number of days spent in the UK in a relevant tax year. A day spent in the UK is normally counted if the individual is present in the UK at midnight of that day. For some of the tests of residence there are a maximum number of days an individual can spend in the UK during a tax year without becoming UK resident for that tax year.

There is an exemption in the SRT for up to 60 days due to “exceptional circumstances” being spent in the UK as a result of events beyond an individual’s control, preventing him or her leaving the UK, provided the individual intends to leave the UK as soon as circumstances permit. In some cases, excluding these exceptional days will mean that the individual does not exceed the maximum day count and remains non-UK resident for the relevant tax year. Examples of exceptional circumstances include: national or local emergencies such as war, civil unrest or natural disasters and, for example, HMRC previously confirmed exceptional circumstances would cover the 2010 Icelandic volcanic ash cloud that cancelled multiple flights.

HMRC’s updated guidance

HMRC’s updated guidance regarding the impact of COVID-19 states circumstances are considered as exceptional where an individual is:
  • quarantined or advised by a health professional to self-isolate in the UK as a result of the virus;
  • advised by official Government advice 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; or
  • asked by their employer to return to the UK temporarily as a result of the virus.
HMRC’s new guidance needs to be considered in conjunction with their current published guidance on exceptional circumstances, and it remains the case that whether days spent in the UK can be disregarded due to exceptional circumstances will always depend on the facts and circumstances of each individual case.

As noted above, for a day to be discounted the individual must intend to leave the UK as soon as l circumstances permit. If an individual has been quarantined in the UK for a period, and depending on his or her overall position, it may be necessary to leave the UK as soon as possible after the end of quarantine, in order to avoid becoming UK tax resident in a tax year. 

This may prove problematic if an individual is able to leave the UK but is not at that point permitted to return to his or her country of residence. We currently do not know if HMRC will enforce this position and whether it may be necessary for an individual to leave the UK and go to a third country for the exceptional circumstances provisions to apply. HMRC has noted their guidance may be subject to review and further change, so this may become clearer in due course.

When does relief for exceptional circumstances not apply?

There are certain elements of the SRT where relief for exceptional circumstances cannot be taken into account.

One of these is the “Country tie”, which is only relevant to those individuals who have been resident in the UK in at least one of the previous three tax years. Where an individual’s UK tax residency position is determined by virtue of the “Sufficient Ties Test”, having an additional “tie” to the UK can significantly reduce the number of days that can be spent in the UK before becoming UK resident.

The Country tie is applicable if the individual is present in the UK at least as much as any other single country during the tax year. Although up to 60 days in the UK may be disregarded as exceptional circumstances for some parts of the SRT, an individual may nevertheless acquire a Country tie, which reduces the number of days they can spend in the UK before becoming resident.

There are also other parts of the SRT where exceptional circumstances cannot be taken into account and which will be relevant to some individuals depending on their specific circumstances. Please contact us if you would like to discuss how this may affect you.

Working in the UK against COVID-19

In a separate measure, the Chancellor of the Exchequer, Rishi Sunak, has announced further changes to the SRT specifically for highly skilled individuals coming to the UK to work on COVID-19 related activities.

The Chancellor has stated that time spent in the UK by individuals working on COVID-19 related activities between 1 March and 1 June 2020 will not be counted towards the residency tests. Whilst final details are awaited, the Chancellor references “anaesthetists through to engineers working on ventilator design and production.”


Although the 60 day limit for exceptional circumstances is unlikely to be an issue for the tax year ended 5 April 2020, this is likely to be more relevant for the tax year ending 5 April 2021 as the pandemic continues. The 60 day limit for the year ending 5 April 2021 will have already been exceeded by many of those individuals currently in the UK, who will therefore need to carefully assess their plans for the rest of the year.

It is possible HMRC may change this guidance at short notice as the situation develops, or the Government might consider increasing the 60 day limit depending on how the pandemic continues.

Importantly, individuals need to also be aware that if they are currently outside of the UK and unable to return due to the pandemic, there may be tax implications in the jurisdiction where they have been residing. If this is something that may affect you, please contact us and we will be able to introduce you to one of our PKF International member firms to assist you.

If you would like to discuss how the rules for exceptional days in the UK may affect your personal circumstances, please contact us for more information.

Written by Jonathon Collins and Phil Clayton in our London office.