HMRC's new 'Q&A' provides further clarity on how the SRT applies to employees displaced by COVID-19

COVID-19 travel restrictions mean many employers are considering what impact unplanned days spent in the UK will have on their employees' tax residence status. HMRC has published further guidance here clarifying how the UK Statutory Residence Test (SRT) applies to individuals who have been unable to leave the UK.

Under the SRT, the number of days an individual spends in the UK during the tax year is considered in a number of detailed tests that determine UK tax residence status.

For some of those tests, a day spent in the UK can be considered 'exceptional', and therefore disregarded, when counting days an individual has spent in the UK.

The COVID-19 pandemic has impacted individuals' global mobility and resulted in many people spending more time in the UK than anticipated. HMRC has published a 'Q&A' document which gives further clarity on how the SRT will apply when employees are displaced due to COVID-19.  

Summary of the key points

Exceptional Circumstances

HMRC has provided further examples of when days spent in the UK are likely to be considered 'exceptional' for Statutory Residence Test (SRT) purposes. These are where an individual:

  • follows official advice not to leave the UK as a result of the virus;
  • is unable to leave the UK due to the closure of international borders;
  • is self-isolating in line with government advice; or
  • is required to come to the UK to support a family member who has been asked to 'shield' or 'self-isolate' (but the individual must demonstrate why it is necessary to come and remain in the UK to provide support).

For exceptional circumstances to apply, the individual must be able to demonstrate their presence in the UK is beyond their control, they are prevented from leaving the UK, and have made every effort to leave once the relevant restrictions have been lifted.

The limit for 'exceptional circumstances' remains at 60 days. And there will be no other relaxations, such as allowing an individual to treat UK work-days as non-taxable if they would ordinarily have been working overseas.

Full-time work overseas

Many individuals who leave the UK for work aim to be considered non-resident in the UK under the automatic 'full-time working overseas' test.

To meet this test, an individual must spend no more than 90 days in the UK during the tax year, of which no more than 30 days can be work-days. 

In addition, there can be no 'significant break' from overseas work – that is, a period of more than 30 days without any overseas work-days.

Although 'exceptional circumstances', if they apply, can be used to extend the 90-day limit, HMRC has confirmed that a day where an individual spends more than three hours working in the UK will still be considered a 'UK work-day', even if that same day is considered exceptional for 90-day purposes. 

There will be no relaxation on this point. 

Similarly, HMRC has confirmed that it will not relax the 'significant break' test.

Other points

HMRC's guidance also covers:

  1. the effect on the SRT 'family ties' test where an individual's children are UK resident but not in full-time education due to COVID-19;
  2. the impact (if any) on an individual's domicile/deemed domicile position;
  3. confirmation that the rules for UK residents claiming 'overseas workdays relief' are unchanged, notwithstanding any duties normally undertaken overseas being carried out in the UK; and
  4. that employment income articles in the UK's double tax treaties remain unchanged, and their application depends on each individual's circumstances.

What should employers do?

Employers should assist assignees to review their residence status and confirm the UK tax consequences.

Many assignees unable to leave the UK who choose to work remotely there will not meet the 'full-time working overseas' test, so should consider if they meet any of the other automatic overseas tests. 

If not, they should consider whether they meet any of the automatic UK tests. 

If none of these are met, they will need to consider whether they are resident in the UK under the 'sufficient ties' tests. 

This is likely to add further complexity when analysing an individual's UK residence position.


HMRC’s ‘Q&A’ document provides some welcome clarity to employers and assignees where they have been unable to leave the UK due to COVID-19, particularly on whether unexpected days spent in the UK can be considered 'exceptional' for the purposes of the SRT.

However, some may be disappointed there are no easements to the 60-day limit for 'exceptional circumstances', or to what constitutes a taxable UK work-day where individuals find themselves unexpectedly working in the UK. This said, UK tax relief may be available under a double tax treaty, where one exists and its conditions are satisfied.

If you have any queries, or would like to discuss how this may impact you and/or your clients, please get in touch with your usual KPMG contact or a member of our tax team.