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HMRC internal manual

Double Taxation Relief Manual

HM Revenue & Customs
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Non-residents: UK income: Employments: short term visitor exemption 183 day rule

The first condition for exemption under Article 15(2) is that the employee must not be present in the United Kingdom for more than 183 days either `in the tax year concerned’ (as in Article 15(2)(a) of the 1980 United Kingdom/USA agreement) or `in any period of 12 months’ (found in Article 15(2)(a) of the 1985 United Kingdom/Norway agreement). It is important to distinguish between these formulae. The latter formula is a much tighter test than that used in the agreement with the USA.

For example, a US resident seconded to work in the United Kingdom for a two year assignment arrives here on 15 October 1990 and leaves the United Kingdom on 1 October 1992. Depending on all the circumstances, he could be taxable in the United Kingdom only for the year 1991-92. For the years 1990-91 and 1992-93 he could meet the condition in Article 15(2)(a) because in both periods he was not present in the United Kingdom for 183 days `in the tax year concerned’.

By contrast, a Norwegian resident working in the United Kingdom would be taxable here throughout the period 15 October 1990 to 1 October 1992 under the test in the agreement with Norway.

Our agreements with Azerbaijan, Belgium, Bolivia, Denmark, Estonia, France, Ghana, Guyana, Iceland, Indonesia, Ivory Coast, Kazakhstan, Korea, Latvia, Malta, Mexico, Mongolia, Pakistan, Papua New Guinea, Sweden, Uganda, Ukraine, Uzbekistan, Venezuela and Vietnam also use the wording of the Norwegian agreement; and the agreement with New Zealand is similar. Most of the United Kingdom’s agreements, however, use the tax/fiscal year formula.

Up until 5th April 2009, when counting to 183 days under Article 15(2)(a),a part day counts as a part day and days of arrival and departure and all other days spent inside the country of activity should be included in the calculation.

From 6th April 2009 onwards, when counting to 183 days under Article 15(2)(a), any part of a day, day of arrival, day of departure, and all other days spent in the UK such as Saturdays, Sundays, national holidays, holidays before during and after the period of work, short breaks (training, strikes, lock-out, delay in supplies), days of sickness (unless they prevent the individual from leaving and he would otherwise have qualified for the exemption) and death and sickness in the family should be included in the calculation as a day the person is present in the country of activity.

Days spent in the UK in transit in the course of a trip between two non-UK points should be excluded form the computation.

From 2008/09 onwards (this overlaps for a year with the previous day counting method), days during which the tax payer is a resident of the UK should not be included in the calculation. The conditions in the treaty are for remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State and does not apply to a person who is resident and works in the same State.

For example if a person is a resident of the UK but is hired by an employer in another State, moves to that State where he becomes resident and is subsequently sent to work for a short period in the UK by his employer, we would only include days in the UK after the taxpayer became a resident of the other State for the purposes of computing whether they had exceeded 183 days in the UK. Days in the UK when the taxpayer was a resident of the UK should not be included.

Similarly if a non-resident taxpayer is seconded to the UK for a short period by their employer and subsequently moves to and becomes a resident of the UK, days in the UK after they became a resident here should not be taken into account for the purposes of the calculation of the 183 days.