Chancellor of the Exchequer Rishi Sunak has temporarily eased the tax criteria for highly skilled foreign workers, including those from India, engaged in the coronavirus fightback in the UK during a fixed three-month period.
The Indian-origin finance minister wrote to the House of Commons Treasury Committee on Thursday to announce that the so-called Statutory Residence Test (SRT) will be waived between March 1 and June 1, which means there would be no change in the tax status of international workers coming in response to the British government’s efforts to fight the coronavirus pandemic.
“We welcome the expertise and resource from those who wish to come to the UK to combat COVID-19 from anaesthetists through to engineers working on ventilator design and production.
“Under normal circumstances, the actions and presence of these individuals in the UK could affect their own tax residence status, potentially bringing their global earnings within the purview of the UK taxation,” notes Sunak’s letter addressed to Conservative Party MP Mel Stride, the chair of Parliament’s Treasury Committee.
“We will amend the Statutory Residence Test (SRT) to ensure that any period(s) between March 1 and June 1, 2020 spent in the UK by individuals working on COVID-19 related activities will not count towards the residence tests. It is right that these changes are time limited and only support those people whose skill sets are currently required,” it adds.
The minister said that the measure will provide flexibility and support to those coming to work in the UK to serve the coronavirus fightback and is required due to the “extraordinary circumstances” unleashed by the pandemic.
But he stressed that the UK government remains committed to the wider framework of the SRT and to ensuring that all individuals pay their fair share of tax in the UK.
“The qualifying criteria will therefore be designed so that the relaxation of the rules is tightly targeted, minimising the risk of abuse. We will also keep the duration of this measure under review as the situation develops, in line with the other support already provided,” he added.
Sunak, 39, has been leading the UK government’s charge on the economic response to the COVID-19 outbreak and mass social distancing measures, which have put the future of many businesses in disarray.
He has unveiled a series of mini-budgets since last month to offer new loans and grants for businesses and workers to help them through the crisis.
“Our economic plan is built on one simple idea: that we depend on each other,” he said earlier this week as he unveiled a new funding to support the UK’s charity sector.
