I’m an Expat living abroad – can I come back to the UK? Tax implications

Last updated 20 January 2021

Expats around the world will be following the news closely, and with the UK foreign office giving advice to not travel to the Hubei province in China and some areas in South Korea along with a warning against all but essential travel to anywhere else in the world, many will be wondering if they are able to come back to the UK with airlines virtually grounded, borders being shut and advice to isolate as much as possible.

It was then welcome news that the Foreign Office has linked up with airlines to ensure that stranded Britons are able to come back to the UK. However, whilst they may now be able to return to the UK under these new arrangements, they may find themselves having to consider the tax impact.

If expats return or are stuck in the UK and spend too much time here, they may find themselves to be a UK tax resident again, bringing their overseas earnings into HMRC’s tax net, potentially causing significant double tax issues.

Under the Statutory Residence rules in the UK, various factors will need to be considered as to how many days you can spend in the UK without becoming tax resident. Ties such as work, home and family have to be considered.

However, it is recognised that there can be circumstances outside someone’s control which may lead them to spend more time in the UK than intended. Therefore the rules allow for up to 60 extra days to be spent in a tax year in exceptional circumstances.

The bar is set very high when it comes to the definition of an exceptional circumstance and whilst there is huge concern and an immense impact that COVID-19 is having around the world, it may not in all cases allow you to claim extra days spent in the UK as exceptional.

HMRC have issued some new guidance in respect of COVID-19 impact, which at least gives some certainty in a number of situations caused by the virus, including being asked by your employer to return to the UK temporarily.

In these circumstances, the extra days spent in the UK can be treated as exceptional.

Other scenarios would need to be considered on a case by case basis to ensure the correct treatment.

With the end of the tax year fast approaching, many expats may feel stranded abroad having used up their UK days for the year. In situations like this, it would be well worth them taking advice on the tax residence rules to see what they can do.