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What is a Certificate of Residence?

In case an individual is the Director of a company in the United Kingdom and he/she is positioned in an overseas country which has a double taxation treaty with the United Kingdom, then in such a situation an individual may be eligible to get back certain taxes from the overseas authorities. In order for the overseas establishments to evaluate whether an individual is eligible to get back the dues they will demand a Certificate of Residence for the United Kingdom Company. The Certificate will authorise whether or not the company is listed within the United Kingdom. An individual will be able to file in an application for a certificate of residence if:

  • He/she is paying United Kingdom taxes on overseas income
  • The overseas establishments have demanded to get a certificate of residence

An individual can protect himself/herself from paying taxes twice by obtaining this certificate.

HMRC Certificate of residence UK

The United Kingdom has signed numerous double tax treaties with multiple foreign countries which intends to make certain that individual who would be accountable to tax on earnings and advances both in the United Kingdom and additional contracting state will not be eligible to pay tax twice on the same earnings or advances.

Form RES 1

Her Majesty's Revenue and Customs (HMRC) has circulated a new web-based form for partnerships and companies who aim to file an application for a United Kingdom certificate of residence. UK citizens can fill form RES1 to file an application and appeal for a Certificate of Residence for a partnership or limited company, comprising Lloyd’s consortiums. Certificates of residence are over and over again required to make certain that treat relief or double tax relief is acknowledged by a country in admiration of specific profits or income. Additionally, in certain cases, a Certificate of residence is a prerequisite to circumvent Withholding Tax. Company’s agents can also apply for a Certificate of residence where evidence of United Kingdom nationality is mandatory.

In order the complete the new web-based form, RES 1, an individual must provide the below mentioned information:

  • Address and Unique Taxpayer Reference (UTR) number of the company or partnership
  • Information about the ‘other country’ that needs the certificate
  • Purpose of applying for Certificate of residence
  • Specify the time period for which the certificate is required – it is important to note that the time period must be in the past
  • Type of income for which the certificate is necessary
  • The following information from the double tax treaty with the other country:
    • Article number relating with the income type
    • Whether the earnings must be subject to tax or liable to tax

Additionally, if an individual is filling the form RES 1 for a partnership firm he/she must keep the following information handy:

  • Details, of the Managing partner, such as full name, Unique Taxpayer Reference (UTR) number and address
  • Details, of all partners such as, designation, full name of each partner, and nationality status of each partner

While completing the form for an organisation or a company, an individual will be required to provide certain information such as company’s tax office ID, the Unique Taxpayer Reference (UTR) number and, in case the company is new and form RES 1 is being submitted before the company’s initial Corporation Tax return is filed, an individual will be required to clarify why he/she considers the company is United Kingdom resident. The partnership form must be sent to HMRC, pay-as-you-earn (PAYE) & Self-Assessment BX9 1AX. On the other hand, a company form can be send by e-mail to contactus.largebusinessscotlandandni@hmrc.gsi.gov.uk or dispatched to MUID 854, Large Business S0862, HMRC, Newcastle Upon Tyne, NE98 1ZZ.

Claiming a relief

In order to claim help under a double tax treaty, a United Kingdom inhabitant must make available confirmation of the information that he/she is United Kingdom tax resident. In case of specific countries, a taxpayer will be required to fill and file a particular claim form which is give out by that country’s tax specialist and which HM Revenue and Customs must recommend with a document. On the other hand, in case of certain countries it might be adequate to make available a letter, known as “Certificate of residence”, which will affirm that an individual was tax resident in the United Kingdom in a specific period. The new form – RES 1, which is available online, offers a well-organized and rationalised way for a United Kingdom resident to substantiate to an overseas tax expert that he/she is United Kingdom tax resident.

For example, the double tax treaty between the United Kingdom and US states that when an individual, in the United Kingdom, earns interest income which arises in the US, the interest earned on this particular income will only be taxable in the United Kingdom. In order to be eligible to get this relief and avoid being taxed in the US, an individual will be required to complete an online form to get a certificate of tax residence in the United Kingdom which he/she could then submit to the Internal Revenue Service (IRS) as a proof of his/her United Kingdom tax residence standing. It is possible that the credential will be useful to individuals who are undoubtedly inhabitant in the United Kingdom rather than other unclear cases. Only the certificate of residence does not alone amount to an official authorisation of United Kingdom residence by HM Revenue and Customs – they will still be liable for question the taxpayer’s residence status as part of an request for information into his/her self-assessment tax return.

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