HMRC to give 'special treatment' to non-residents forced to overstay

Pedro Gonçalves
HMRC to give 'special treatment' to non-residents forced to overstay

HMRC will allow special treatment to be given to expats that face risking their non-residence tax status through being stuck in the UK longer than anticipated. 

British expatriates and non-residents who are stranded in the UK because of coronavirus travel restrictions could face unexpected tax bills over tax residence rules.

The tax office has now declared that people who face impairing their non-residence tax status through having to stay in the UK longer than planned could apply for special treatment under "exceptional circumstances" regulations.

Our overriding concern at this stage is what if 60 days is not enough?"

Many countries have issued travel bans due to the outbreak, which could require people to remain in the UK unexpectedly. 

HMRC has acknowledged that the epidemic is affecting people's ability to move freely to and from the UK, or requiring them to remain unexpectedly. It has announced that it will 'look sympathetically' at any individual cases where the virus has caused issues or difficulties.

However the 60-day annual limit set out in the 2013 statutory residence test is still in place and relevant, and HMRC warned it will consider the facts of each individual case before deciding to disregard days spent in the UK due to exceptional circumstances.

In a guidance note HMRC said it will treat people quarantined or self isolating in the UK, those advised not to travel or unable to due to border closures and people asked to return to the country by their employer due to the outbreak as exceptional circumstances.

"The revenue has never done anything like this before," Simon Goldring, a partner at law firm McDermott Will and Emery told the FT. "I have never seen the revenue respond so fast to help people."

Some practitioners are concerned that the concession does not go far enough. "There are still a number of concerns for [non-resident] individuals in the UK," said Ceri Vokes, partner at Withersworldwide.

"Our overriding concern at this stage is what if 60 days is not enough? HMRC should update its guidance if the crisis looks set to continue beyond 60 days into the new tax year and particularly if the UK goes into lock-down," she added.

The HMRC note said a final decision "will always depend on the facts and circumstances of each individual case".


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