A new statutory test of residence is introduced from 6 April 2013. This is designed to introduce some certainty into an area where significant amounts of tax can be involved.
The test has three parts:
1. First you consider some tests to see if a person is automatically regarded as non-resident.
2. If this is not conclusive, you next consider further tests to see if the person is automatically resident.
3. If neither result is conclusive, you should then consider how many UK ‘ties’ apply to the person and the number of days the person spent in the UK.
There are tables that determine how many factors must be met for the various bands of UK presence, which will subsequently establish your UK residence status.
The concept of ‘ordinary residence’ is abolished, but overseas workday relief is retained.
HMRC has published detailed guidance on this subject. We can advise on how these provisions apply to your workforce.