Government proposes new statutory residency test

People who spend part of the year living abroad in the hope of evading the beady eye of HMRC are in for a shock!

At the end of last week, the government proposed a new residency test to determine the status of online accountants and other working individuals. Under the new proposal, people are only guaranteed to be classed as non-resident if they are in the UK for fewer than 10 days in any one year.

The government proposes to categorise individuals into conclusive non-residents, conclusive residents and those in-between. The new statutory residency test will look at factors such as accommodation, family, the amount of work done in the UK, amount of time spent in UK in previous years and the proportion of time spent here compared to abroad.

Individuals who spend less than ten days in Britain will fall into the non-residency category, regardless of any other factors. People working abroad on a full-time basis and those who have been non-domicile for the last 3 years will also be non-resident.

Residents are those who are in the UK for more than 183 days per year or possess just one abode, which is in the UK.

The government says the new rules will make it harder for people to relinquish their status if they have been UK domiciled for the past three years. The consultation lays down a tiered set of rules dependant on the amount of time they spend in the UK; the longer the stay, the fewer factors apply.

Anyone unsure of their residency status may want to visit a qualified accountant for advice.

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