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Non-Residential Tax Returns in the UK

More Group
24 October, 2018

What are Non-Residential Tax Returns?


Self-assessment tax returns are a declaration of how much income a person has received during a tax year. These are sent to HMRC so they can calculate how much tax you owe in the UK.

If you reside abroad, you may still be required to file a self-assessment tax return with HMRC. Additionally, even if you have non-UK residency status, you may still need to fill out a tax return if you have a course of UK income.

Examples of scenarios where a tax return would be necessary:

  • If you are a director of a UK company
  • If you are a landlord receiving UK rental income
  • If you have income from self-employment in the UK
  • If you conduct business in the UK but do not live there
  • If you are earning income from assets based in the UK

Late submission of tax returns (after the 31st January) will incur a penalty. If you are one day late, a penalty of £100 will be incurred, and if you are three months late, £10 a day will be deducted with a maximum of £900. There are also additional charges for six months and one year late. The best way to check whether you are liable to pay tax in the UK and steer clear of any unexpected penalties is to is to determine your tax residency status.

How do you determine your residency status?


Residential status is essential to determine if you have any tax liability in the UK. Each year individuals must test themselves against a set of criteria to establish their residential status.

In 2013/14 the Statutory Residence Test (SRT) was introduced to simplify residency status determination. However, people who lived in or visited the UK before 2013/14 should use the old rules in combination with the new SRT rules. Without exception, under both sets of rules, if you spend 183 days or more in the UK in one tax year, you will be classified as a UK tax resident.

Factors that can affect your UK residence status include:

  • The location of your home
  • Your employment status in the UK and abroad
  • Any ties to the UK, for example, family or property
  • Time spent in the UK versus other countries
  • Your UK residency in previous years

As you can tell residency is a complicated area, and to make matters more complicated, your status can be affected by residential positions held in previous years. If you are a non-resident and want to preserve this status, our experts can advise you on the best options available to you. Remember, if you calculate your tax residency incorrectly this could lead to unexpected penalties and tax bills. Our experts can help you get it right, and through years of experience and professional training, our accountants have been taught to seek out tax benefits for clients while ensuring compliance with the law.

What could your status effect?


As mentioned, tax liabilities are different for UK residents and non-residents. Establishing your residential status will help you determine your tax liability:

  • UK residents: Your income tax will be based on all income in the UK and abroad for the time you reside in the UK.
  • Non-resident: UK income tax is just based on income generated in the UK, this could be from employment, UK dividends, or UK property rental to name a few.

If you come from the European Economic Area or the UK, you are entitled to a personal tax allowance of £11,850 in (2018/19) which covers any UK income sources. Remember, it is possible to be a tax resident in more than one country. Many countries have a double taxation agreement with the UK. This means if you live in a country which taxes you on your UK income you can claim tax relief in the UK, so you will not be paying tax twice. If you claim tax relief through the double taxation agreement, then you do not need to report your income to HMRC.

Submitting your Non-Residential Self-Assessment Tax Return


The tax period you must refer to in the return is the 6 April to 5 April from the previous year. Non-residents are unable to use HMRC's online return. Instead, you will need to send it by post, purchase specialist software, or hire an accountant. If you chose to send it by post, the deadline for this on the 31 October, whereas online returns are due four months later, on the 31 January.

How More Group can help


The guidelines surrounding non-residential tax planning are complex and continually changing. At More Group, it is our job to focus on staying up to date on tax procedures. We have a team of experts who can facilitate your non-residential tax planning.

We can provide clarity on this complex topic and ensure you are compliant with local tax laws in multiple jurisdictions. More Group is proud of the service we provide, which is personalized, efficient, reliable, and professional. If you need help getting your non-residential planning in order, contact us to book a free consultation.


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