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As coronavirus continues to spread across the UK, new challenges, specifically those related to tax, are beginning to present themselves on a day-to-day basis.

The latest hot-topic concerns the fact that UK health authorities now have the power to quarantine individuals, both UK and non-UK residents, who present a risk of further spreading the virus.

The operative word in the above sentence is “residents”. The UK’s statutory residence test states that the number of days someone spends in the UK during the tax year dictates whether or not they are a UK resident for tax purposes. The total number of days someone can spend in the UK without becoming a UK resident is dependant on their circumstances, as well as what is considered to be their “ties” to the country.

The length of time an employee can work before UK tax becomes applicable will depend on their tax status. Each individual will have a certain number of allocated days that they can spend in the UK, without being a resident for tax purposes.

With the escalation of the coronavirus crisis, as well as the fact that the end of the tax year is fast approaching, there is an increased risk that if someone who was approaching the upper limit of their allocated days became quarantined, then they may be required to pay UK tax.

Should this situation arise, there is a statutory relief that may be able to help those affected. Consequently, should someone be required to stay beyond their allocated day-count, then they could look to claim that “exceptional” circumstances beyond their control have prevented them from leaving the UK.

What is considered to be “exceptional” is certainly up for interpretation; typically these include emergencies at either a national or local level and life-threatening medical conditions that an individual may experience. It is highly likely that if someone were to become forcibly quarantined by UK authorities, then their situation would be deemed to be “exceptional”.

Currently, the number of days that someone is permitted to ignore under their allocated day-count is restricted to 60 days. Furthermore, once the period of quarantine has been lifted or expired, affected individuals would be required to leave the UK at the earliest opportunity.

Coronavirus presents a further problem - in the event that a non-UK resident chooses to self-isolate themselves in the UK, then they may risk staying beyond their allocated days.

Self-isolation does not necessarily meet the requirements of an “exceptional” circumstance, and unless someone has explicitly been told by a health or medical professional to self-isolate themselves, then the chances are that this would not meet the relevant criteria.

Should an individual choose to continue working in the UK while in self-isolation, the likelihood is that they will be considered to have an additional UK tie” and as such, they will be reducing the number of days that they can be in the UK without becoming resident.

At this current point in time, there is no sign that any emergency measures will be put in place to address the concerns of quarantined individuals. However, as the situation worsens, there is a chance that special dispensations will be made that look to reduce the impact on those affected by coronavirus.

If you would like to find out more about PayFit, or have any questions about the ways we may be able to support you with your payroll and HR processes, then don't hesitate to contact us today.

PayFit blog author
PayFit blog author

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