PART 2: TAX
A number of businesses have already made a corporate decision not to engage any external workers and to provide direct employment instead. In many other cases the decision is to move the worker to a PAYE arrangement but without conferring employment rights. It is not known if self-employed workers have any appeal against this decision as it is not a formal determination using the CEST process because the requirement to make a formal determination and to issue a determination certificate does not take effect until 6th April 2021. In addition it is not known if all such engagers will be providing a full employment contract or if they will use the “Limb B worker” category which requires the payment of tax and NICs under PAYE but does not require them to provide any employment rights or benefits. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS It remains to be seen if the implementation of “off-payroll” worker status will be successful here and then whether it will be extended to all private sector engagers. STATUTORY RESIDENCE TEST (SRT) The SRT came into force on 6th April 2013. It put beyond doubt an individual’s tax residency position following the protracted case of Robert Gaines-Cooper. He has consistently argued that since he left Britain for the Seychelles in 1976, he has obeyed the rule that gives non-resident status and tax benefits to anyone who spends less than 90 days a year in the country. However, High Court and Appeal Court judges ruled he had not made a “clean break”, citing a family house in Henley-on-Thames, a UK-based collection of classic Rolls-Royces and trips to Ascot. From 6th April 2013 there will be three strands to the SRT: • Conclusive non-residence • Conclusive residence • Other connection facts and day-counting • Conclusive UK non-residence: if one of these tests is met: • Resident in the UK for one or more of 3 previous tax years and will spend fewer than 16 days in the UK in current tax year, or • Not resident in UK for any of last 3 tax years and will spend fewer than 46 days in UK in current tax year • In current tax year leaves UK to take up full-time post overseas • Dies in current tax year having spent less than 46 days in UK • Conclusive residence: if one of these tests met • At least 183 days in UK in tax year • 91 days with a UK home and no overseas home • Working full-time in UK during current tax year • Dies in current tax year subject to conditions, one of which is to have been UK resident during last three years. No printing, copying or reproduction permitted. Other connection facts and day-counting Number of days in UK plus ‘connection with UK’: • UK-resident family • substantive UK employment or self-employment • available accommodation in UK • 91 days in UK in at least one of the previous two tax years.
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