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Overseas Workers: Income Tax

Question for Treasury

UIN 171488, tabled on 18 March 2021

To ask the Chancellor of the Exchequer, if he will make it the policy of the Government to extend exemption from income tax for the year 2020-21 to people who work full time overseas but have remained in the UK for a longer period than intended in the tax year as a result of the closure of international borders and restrictions on international travel.

Answered on

23 March 2021

The Government believes the UK’s current residency rules broadly deliver outcomes for taxpayers that are fair and reasonable. It is a fundamental premise of the tax system that an individual who spends much of the tax year in the country will be treated as resident for tax purposes.

HMRC have published guidance which explains that in some circumstances, time spent in the UK due to Covid restrictions will not be counted as days spent in the UK for the purpose of the Statutory Residence Test under the ‘exceptional circumstances’ rule. However, the exceptional circumstances test excludes only up to 60 days of presence and so will not preserve non-resident status for an individual who is here for most of the year.

The Government does recognise that the current pandemic has caused immense difficulties for many people and this is why it has provided a very substantial economic support package.

Answered by

Treasury
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