COVID-19 | Exceptional circumstances and workdays spent in the UK

The coronavirus (COVID-19) pandemic has affected the ability of individuals to move freely to and from the UK and has resulted in extended, unscheduled, stays in the UK. Whether these days spent in the UK can be disregarded due to exceptional circumstances will always depend on the facts and circumstances of each individual case.

New guidance has been published by HMRC on 23 March 2020 confirming conditions to be met for days spent in the UK to be considered as “exceptional circumstances”. This latest guidance points out that it is necessary to read this announcement in conjunction with the current published guidance on exceptional circumstances.

This latest guidance from HMRC states:

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

These circumstances are to be considered as exceptional

Undoubtedly, there is still much uncertainty relating to when the exceptional circumstances days will be deemed to have commenced. It was only on Monday 23 March that the Prime Minister made it clear that the Government’s advice is not to travel from home, and the FCO’s advice is to return to the UK, if overseas. There are also timing issues surrounding those who have taken either specific medical or general advice to “self-isolate” earlier during this crisis.

One area of difficulty for most working expatriates, who have been repatriated, relates to the Third Automatic Overseas Test. In order to maintain non-residence status, they will need to continue satisfying the Full Time Work Abroad (FTWA) criteria. The exceptional circumstances only impact the basic day count for establishing non-residence – it does not alleviate the problems for expatriate employees who may inadvertently trigger the “significant break in overseas work” criteria or, indeed, those expatriates who are continuing to work once back in the UK and so could soon potentially exceed the permitted 30 UK workdays. The availability of exceptional circumstances days does not help in any of these scenarios.

As a UK workday is deemed to be 3 hours or more travel/work, those who have come back to the UK and who are working in the UK should limit their duties to just under the 3 hours per day to ensure the day is not counted as a UK workday. So, working on the basis of little and often whilst in the UK, and making up additional work time overseas once the crisis ends, could be beneficial in maintaining Full Time Work Abroad status and remaining under 30 UK workdays. In this way, the individual may avoid being drawn into UK residency for tax purposes during the time spent in the UK.

These exceptional circumstances days can be taken into account when counting UK days under the Sufficient Ties Test (STT), which is part of the SRT, and the Split Year elements of the SRT.

The continued presence in the UK of expatriate employees of an overseas employer could have unforeseen corporate consequences, such as the creation of a Permanent Establishment in the UK and UK PAYE obligations for the foreign employer.

It is worth noting that the exceptional circumstances days are not a “Get Out of Jail Free” card and many expatriate employees, in particular, will struggle to maintain non-residence status the longer the COVID-19 crisis goes on.

If you need any further help, please contact [email protected]. And stay safe!