How to Apply for Tax Certificate in the UK

Posted by: Jay Redman
Category: VAT Compliance
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As an individual or company who might be working or living in another country, the income you earn is subject to tax. Regardless of the activity you are engaged in, it is important to have a tax certificate or certificate of residence to prevent you from paying taxes in two separate locations. A tax residency certificate is a document issued by Her Majesty’s Revenue and Customs (HMRC) that proves your residency in the United Kingdom and allows you to claim tax relief in other countries.

For overseas authorities to validate your claim, HMRC must confirm that you are a UK resident. If it is proven that you are a UK resident after verification, you will be entitled to a claim on your tax services under the double taxation agreement, unless HMRC refuses to give a certificate of residency. Under the double taxation agreement, you should be able to claim taxes paid in another country. The concerned overseas authority chooses whether or not to offer relief from foreign taxes.

TABLE OF CONTENTS: 

  • What is a tax certificate and why do you need one?
  • What information does HMRC need?
  • How to apply for a Certificate of residence for individuals, businesses or partnerships? 
  • How can you register for VAT in the UK?
  • Points to remember for a certificate of residence. 

FAQs:

  • How long can the assessment take?
  • What information should businesses provide?
  • How do I confirm my residency in a third country for collective investments?

What is a Tax Certificate? 

A tax certificate is typically used by a registered business for tax purposes to prove that it is located in the UK. If a person pays tax on their overseas income in the UK and has a certificate of residency, he or she can claim tax relief in another nation. 

You can apply for a tax certificate under the following conditions;

  • If you are living in the UK
  • If there is an agreement of double taxation with the concerned country
  • If you already paid tax and are applying for a refund

What Information does HMRC need?

When you apply for a certificate of residence, you must tell HMRC why you need a certificate of residence as well as any information about double taxation agreements under which you wish to make a claim. You equally need to provide information about the following;

  • The relevant income for which you wish to make a claim. 
  • The period for which you require the certificate of residence, equally referred to as the tax certificate. 

If the double taxation agreement requires it, you must prove that you are the beneficial owner of the income for which you are filing a claim and all income for which you are claiming is subject to UK tax.

If you require a Certificate of Residence in the United Kingdom for a period beginning on or after April 6, 2013, and you have not yet submitted a self-assessment tax return for that period, you must inform HMRC of the following:

  1. How many days in the UK did you spend during the tax year? (For how many days you need a Certificate of residence).
  1. If you stayed in the UK for less than 183 days during the tax year (Pass the statutory residence test to get the tax residency certificate).
  2. Your arrival or departure date in the United Kingdom.
  3. If you entered or left the UK during the tax year, you’ll require a certificate of residence for the date you started or stopped being a resident.

How to Apply for a Certificate of Residence?

There are a variety of ways to apply for a certificate of residence, depending on your type of business. The methods for obtaining a certificate of residence differ from one company to the next.

1). Individuals and sole traders can apply for a certificate of residence in one of two ways:

  • Use your Government Gateway user ID and password to apply online.
  • Send a form by email. You must create a new User ID if you do not already have one. You must equally follow the same approach if you are an agent applying on behalf of an individual or single trader.
  • If you receive a form from another government asking you to certify your residency status, you must send it to this address BX91AS HMRC.

2). Businesses: For letter requests, companies must use the RES1 form. You must send this letter request to your customer compliance manager who is in charge of the company’s tax affairs, or you must make the identical request to the corporate tax services office if you are in charge of the company’s tax affairs.

3). Partnerships: For letter requests, you must also utilize form RES1 in the case of a partnership firm. If your partnership firm has a customer compliance manager or customer coordinator in a large company, you should email requests to them rather than to the address shown below — pay as you go and self-evaluation BX91AS HMRC.

Points to remember for Certificate of Residence

  • No certificates of residence can be granted for dates in the future.
  • Legally admissible documents are scanned forms and certificates of residency letters issued and transmitted to a foreign jurisdiction by HMRC.
  • In the HMRC’s information manual INTM162020, you’ll find all of HMRC’s criteria.
  • The authentication form or apostille is obtained by paying a nominal charge to the Financial Conduct Authority (FCA) by the customer (person filing the claim). It’s simple to do on the government’s website. 
  • The primary goal of obtaining a certificate of residency is to take advantage of double tax treaty benefits.
  • The foreign authority may seek confirmation of duties other than company tax, such as VAT.

Conclusion.

If you are subject to double tax, it is important to apply for a tax certificate of residence in the UK. The process of applying for a tax certificate is different for businesses, individuals and partnerships. This article shows you exactly how to apply for the tax certificates as well as what information may be required of you. 

FAQs:

  • How Long Can the Assessment Take? 

Due to COVID-19 restrictions, the assessment can take 2-3 weeks depending on the complexity of the application and if any further information or documents are required. If your application is straightforward, you can expect a quicker turnaround.

  • What Information should Businesses Provide?

New businesses that have not yet filed a tax return must inform HMRC of each director’s and shareholder’s name and address. As a new business, you must explain why your company believes it is resident in the UK. 

  • How do I Confirm my Residency in a Third Country for Collective Investments? 

For investment purposes or collective investment schemes, you must use the CISC9 form, complete it and send it to the address mentioned in the form. In the event where another country has provided you with a form to confirm your residency in the UK, you equally have to include this in the mail. 

Author: Jay Redman