As a CFO advising PE firms and family offices, I watch tribunal cases like a hawk. Not for sport, but because they rewrite the rules you rely on for tax planning. Michael Parker v HMRC [2026] UKFTT 00652 (TC), decided 5 May 2026, is one such case. A rotational engineer in Iraq dodged UK residency for 2019/20 by excluding four disputed days under the Statutory Residence Test (SRT). HMRC lost, handing CFOs managing expat teams a playbook upgrade.
This isn’t abstract law. It’s about engineers, oil workers, and consultants rotating home—common in PE portfolio companies with international ops. Parker’s win clarifies transit exceptions and ‘exceptional circumstances’, rejecting HMRC’s narrow RDR3 guidance. Let’s break it down.
Case Background: 100 Days, Four Disputes
Parker, UK-domiciled but working full-time in Iraq, hit 100 UK midnights in 2019/20. To claim non-residency via the third automatic overseas test (full-time work abroad), he needed under 91 after exclusions. HMRC greenlit seven COVID days but blocked:
- Three transit days (8, 17, 28 Feb 2020): Heathrow arrivals from Iraq/overseas, overnight airport hotels, family meet-ups, next-day departures (Naples/Tokyo/Ireland).
- One exceptional day (29 Feb): Dublin flight cancelled post-boarding due to Storm Jorge closing the airport; rebooked next day.
Excluding these dropped him to 89 days. Tax at stake: £64,946. Tribunal (Judge Anne Fairpo): Appeal allowed. Full details via Temple Tax or ICLR.
Transit Exception: Separate Tickets and Hotels Now OK
Para 22(3) Sch 45 FA 2013: Disregard days where you arrive/depart UK ‘as a passenger’ solely for transit.
HMRC argued: No through-ticket, hotel stays, family dinners = not ‘solely transit’. Tribunal disagreed. Purposive read: Separate tickets (employer to UK, self onward) fine in modern travel. Hotels/meals incidental if linked to journey. Family joins OK if travel-related, not social.
First FTT ruling on this para. Macfarlanes calls it ‘commonsense’ vs HMRC rigidity. Ross Martin: Document itineraries religiously.
Exceptional Circumstances: Storm Jorge Qualifies
Para 22(4): Days you’re prevented from leaving by ‘exceptional circumstances beyond control’.
Storm Jorge (29 Feb 2020): 90mph gusts halted Dublin landings 14:20-15:53. Parker’s flight: Boarded, cancelled, luggage held, airline hotel/rebook. Departed 1 Mar.
Tribunal applied A Taxpayer v HMRC [2025] EWCA Civ 106’s five-step test: Event exceptional (rare weather chaos, BBC reports 20+ diversions). Parker couldn’t leave practically—no luggage dump or fantasy flights required. Rejected HMRC: Weather/flights not ‘routine’.
KPMG Tax Matters Digest: Real-world focus; no hypotheticals.
HMRC RDR3 Guidance: Outdated and Narrow
HMRC’s RDR3 downplays weather/delays. Tribunal ignores it for legislation. Dixcart: Keep records; burden on you.
Compare LexisNexis summary.
CFO Implications: Rotational Workers and PE Portfolios
For PE CFOs: This bolsters non-res claims for rotational staff (oil/gas, engineering, consulting). Build 10-day buffers, but these exclusions now viable.
- Audit-proof transit: Log bookings, hotels as ‘layover’.
- Exceptional playbook: Weather/unrest—screenshot cancellations, airline comms.
- Portfolio cos: Update expat policies; HMRC enquiries rising post-Brexit.
Risks: HMRC appeal? Possible, but taxpayer-friendly trend (SRT overview). No precedent value, but persuasive.
Action for CFOs: Trim the Day Count
SRT splits hairs. Parker proves tribunals favour reality over bureaucracy. Review your team’s 2019/20-2026/27 logs now—claims open 4yrs + discovery.
Tanous handles SRT for PE-backed firms. Email mark@tanous.co.uk for a no-obligation review. We’ve saved clients six figures on residency alone.
Mark Hendy, FC A, Tanous Limited