Non residence - the new maths
Those who wish to achieve the status of being not resident in the UK have, amongst other issues, to be aware of the time they spend in the UK in a tax year. If they spend more than 183 days in the UK in any tax year then they will be treated as resident here. Spending on average more than 90 days a tax year in the UK (measured over a rolling four year period) may also present a problem.
Old rules
The common question that is asked in situations like this is 'what is a day?' In the past, HMRC adopted an approach that said that they would normally ignore days of arrival and departure. This has meant that regular visitors back to the UK could discount two days on every trip.
Let's take James as an example. He works full time for a company in France but he likes to come home each weekend to visit his family and, in addition, he always takes a couple of weeks holiday at home. In the tax year 2007/08 he was home for 49 weekends (Friday to Sunday) and also had 10 weekdays in the UK. He will have to count 49 Saturdays (each Friday and Sunday will not count because they are days of arrival and departure) plus 10 other days, giving him a total day count of 59 days.
New rules
HMRC have changed the rules from 6 April 2008, admittedly not as severely as they had originally indicated, but still enough to cause James and others like him to look closely at their situation. Under the new rules, any day where an individual is in the UK at midnight will generally count as a day of presence. (The original proposal was to have both days of arrival and departure counting as UK days.)
This means that if James continues his visits on the same basis, he will now find that two days each weekend will count, because both Friday and Saturday will be days spent in the UK at midnight. He will find that he has 108 days counting - not initially a problem but if the pattern continued he would have some difficulty meeting the 90 day average. He may therefore want to reconsider his pattern of visits.
Anyone who is regularly moving in and out of the UK will find the new rules a headache. The more visits they make, the bigger the problem, because an additional day may count each time. It is also important to keep a very careful record of movements in and out of the UK, so that if HMRC want to see evidence in support of a claim for non residence, it can be supplied. Whilst this may seem tedious, the time and effort spent could save real aggravation later on if enquiries are made.
Be careful
This article only features on one particular facet of the non residency rules, how to count a day! Non residency is an area that HMRC are currently very interested in and you may wish to talk to us about their current approach.
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