RDRM11180 - Residence: The SRT: Annual and parenting leave

For an individual who is an employee annual leave is a paid day when they are allowed to be away from work.

Parenting leave means maternity leave, paternity leave, adoption leave or parental leave, whether statutory or otherwise allowed by an employer.

For self-employed individuals carrying on a trade, profession or vocation, annual leave and parenting leave is time off work for the same purposes as the purposes for which annual or parenting leave is granted to employees.

What is a reasonable amount of annual or parenting leave will depend on the indivdual’s situation, including:

  • the nature of the work
  • the standard number of annual or parenting leave days in the country in which the individual is working

For self-employed individuals carrying on a trade, profession or vocation, what are reasonable amounts should be assessed against annual or parenting leave an employee doing similar work might reasonably expect to be entitled to.

Example

Anne is working overseas, and has had a period of maternity leave, she is considering her UK residence status. She finds she needs to consider whether she has worked sufficient hours overseas in the tax year, to be treated as working full-time overseas for the purposes of the third automatic overseas test.

Step 1: Anne has no disregarded days

Step 2: Anne has no sickness absences or gaps between employments. Her normal pattern of employment is for 7 hours 40 minutes, Monday to Friday. During the year she:

  • worked as normal between 6 April and 2 June
  • started her maternity leave on 3 June, returning to work after 26 weeks, on 2 December
  • worked from 2 December to 20 December
  • took annual leave across the Christmas period from Monday, 23 December through to Wednesday 1 January, returning to work on 2 January
  • worked as usual through from 2 January to 5 April; taking 5 days leave from Monday 3 February to Friday 7 February, and another 3 days leave from Thursday 13 March to Monday 17 March (dates are inclusive).

Anne calculates her net overseas hours (Step 2)

  • between 6 April and 2 June, she worked on 38 days, (there were 2 bank holidays in this period)
  • between 2 December and 20 December she worked on 15 days
  • between 2 January and 5 April she worked on 59 days
  • total days worked = 38 + 15 + 59 = 112
  • on each day she worked for 7 hours 40 minutes, therefore her total net overseas hours = 112 x 7 hours 40 minutes = 858 hours and 40 minutes

Step 3: To calculate her reference period Anne starts with 365 days and subtracts:

  • maternity leave, including embedded weekends from Monday 3 June, to Friday 29 November = 180 days, (30 November and 1 December do not meet the rules about embedded non-working days)
  • annual leave on 23, 24, 27, 30 and 31 January, 3-7 February and 13, 14 and 17 March = 13 days

As 25 and 26 December and 1 January and all the weekend dates are non-working days that do not meet the rules about embedded non-working days, Anne makes no adjustment for them.

Anne calculates her reference period:

= 365-180-13 = 172 days

Step 4: Divide number from Step 3 by 7 = 172/7 = 24.57 (rounded down to 24)

Step 5: Divide net overseas hours by result from Step 4 = 858 hours and 40 minutes/24 = 35.78

Anne meets the sufficient hours test. She will need to consider whether she meets all other parts of the third automatic overseas test, in particular that the number of days spent in the UK was less than 91.