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The Non-Resident Test For Employees Stranded In The UK

A really useful update ...


Posted by Helen Beaumont on 12/05/2021 @ 8:00AM

Many of our accountancy trade bodies have consulted with the Treasury on a range of tax difficulties faced by those stranded in the UK during the pandemic. They accidentally became residents, with obvious tax consequences ...

A lot of interesting stuff has come out of this. Yes, some of it is frustrating, but it clears up a lot of uncertainty!

A lot of interesting stuff has come out of this. Yes, some of it is frustrating, but it clears up a lot of uncertainty!

copyright: imagestock / 123rf

Because of this, HMRC has introduced a range of tax rule relaxations this year in respect of the Statutory Residence Test. However, with the range of lockdown measures continuing, further issues have inevitably arisen.

"The ICAEW published their correspondence with HMRC on a wide range of issues!"

They explain that the circumstances of the various lockdowns and travel restrictions, the 60-day limit on disregarded days for exceptional circumstances is inadequate. Although HMRC confirms that it considers 60-days to be adequate, there's nothing they can do as it's a statutory limit they have no powers to extend.

In the context of all the other COVID-19 legislation, it wouldn't have been much trouble to fix this, but when you look at CRCA 2005 s9, HMRC can, "do anything they believe necessary in connection with the exercise of their functions", so you would have thought they had the authority.

And what about the Family Tie issue, which could unexpectedly make someone a UK resident because the schools have been shut? Well, there are no changes proposed here either.

Should a non-resident individual be stranded in the UK, then HMRC has confirmed that any earnings from this country will be excluded from domestic taxation and treated as foreign earnings if they are taxed in their own country.

A lot of interesting stuff has come out of this. Yes, some of it is frustrating, but it clears up a lot of uncertainty, which is always helpful when dealing with HMRC.

Until next time ...



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About Helen Beaumont ...


Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.