The First-tier Tribunal has allowed a taxpayer’s appeal in a case concerning the UK Statutory Residence Test, providing useful guidance on the treatment of transit days and exceptional circumstances.
In Parker v HMRC, the taxpayer was physically present in the UK at midnight on 100 days during the 2019/20 tax year. HMRC accepted that seven of those days were disregarded under the COVID-19 exception, but disputed a further three days claimed under the transit exception and one day claimed under the exceptional circumstances exception. Those four days were decisive, if disregarded, the taxpayer’s UK day count fell to 89 days and he satisfied the third automatic overseas test.
The taxpayer had arrived at Heathrow from overseas destinations on 8, 17 and 28 February 2020, stayed overnight at an airport hotel, and left the UK the following day. HMRC argued that the UK was his final destination on each arrival because the flights were booked on separate tickets, and that he was therefore not “in transit”.
The Tribunal rejected that approach. It held that the legislation does not require a person to be travelling on a single through-ticket in order to arrive in the UK “as a passenger”. The taxpayer had been conveyed to the UK by aircraft and therefore arrived as a passenger. His decision to use separate tickets was commercially and logistically understandable and did not prevent the transit exception from applying.
The Tribunal also found that the taxpayer had not undertaken activities substantially unrelated to his passage through the UK. He remained at Heathrow or at a nearby airport hotel, ate there, slept there, and travelled only between the hotel and the airport. Meeting his wife and stepdaughter did not prevent the exception from applying because they were travelling with him on the onward flights. The meetings were connected with the onward travel, not separate UK-based activities.
The exceptional circumstances issue related to 29 February 2020, when the taxpayer had boarded a flight from Heathrow to Dublin, but the flight was cancelled after boarding because Dublin Airport had been closed during Storm Jorge. HMRC argued that adverse weather and flight cancellations were not exceptional and that the taxpayer could have tried to leave the UK by another route.
The Tribunal disagreed. Applying the Court of Appeal’s guidance in A Taxpayer v HMRC, it considered the circumstances as they presented themselves at the time, not with hindsight. The closure of a major airport due to a named storm, together with the wider travel disruption, was out of the ordinary. The taxpayer was not required to abandon his checked luggage, ignore the airline’s rebooking arrangements, or attempt speculative alternative travel. By taking the airline’s rebooked flight the following morning, he had left the UK as soon as the circumstances permitted.
The decision is a useful reminder that the SRT day-counting rules are highly fact-sensitive. It also confirms that HMRC cannot impose additional requirements, such as the need for a single ticket, where those requirements are not found in the legislation.