The new measures include a temporary relaxation of tax residency rules for overseas workers helping in the UK with Covid-19-related activities and an extension to the cut-off employment date for furloughed employees.

The extension of the cut-off date from 28 February to 19 March suggests that more than 200,000 more employees could now be furloughed following changes to the Coronavirus Job Retention Scheme to help pay people’s wages, the BBC reported. Workers will need to have been on the payroll by 19 March, the day before the scheme was first announced.

In a move that could help recruiters import more overseas talent in the fight against Covid-19, UK Chancellor Rishi Sunak has called on the Treasury to relax tax residency rules for overseas individuals who are already here working against Covid-19. 

An HMRC spokesperson explained to Recruiter: “In line with the statutory residency test and depending on the facts of an individual case, exceptional circumstances may enable individuals to disregard days spent in the UK, when determining their tax residency. We have updated our public guidance to provide clarity for customers during this time.”

However, the spokesperson warned, “this is not a ‘blanket ruling’ and should be read in conjunction with existing guidance, and it does not represent a change in the rules or requirements for determining tax residency. For example, on a case-by-case basis, we have previously applied the same rules in the same way when looking at individuals personally affected by the 2014 Ebola outbreak in West Africa.

“We are keeping the situation under review,” the spokesperson said.

Interpreting the move, Nimesh Shah, a partner at accounting, tax and advisory practice Blick Rothenburg, said: “The move signals the government’s desire to attract more individuals from abroad to come to the UK to support the efforts against the Covid-19 pandemic. Shah said the move was welcome, but should have happened sooner and that the government could have gone further “by introducing a complete tax exemption on earnings for overseas individuals working in the UK in the fight against Covid-19… The government should do everything it can to attract the best talent to the UK”.

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