GOV.UK
Non-residents trading in the UK: introduction
Introduction to module
Source rule of UK taxation
This section of the guidance concerns non-residents with a trade, profession or vocation in the UK and details the circumstances in which and the means by which the UK taxes the profits arising in the UK to a non-resident. This includes individuals and companies whether they act in partnership or not where one or more partner(s) are non-resident and any of the activities of the partnership amount to trading in the UK.
Non-residents process map
In all cases where you are considering the potential chargeability of a non-resident you should consider the facts of the case in the process illustrated below. The relevant guidance for each stage of consideration is detailed.
| Stage 1 |
Is there a charge under domestic legislation on the activities in question? If there is not, you need consider the case no further. [INTM261000 to INTM264120]
Stage 2
If the non-resident is a resident of a state with which we have a Double Taxation Agreement, does the treaty restrict the domestic charge? [INTM265010 to INTM266160]
Stage 3
How much are the chargeable profits that can be taxed in the UK? [INTM267010 to INTM267170]
Stage 4
| Having established that there is a domestic charge and having taken account of the effects of the relevant treaty, how do we assess and collect any tax that is due? [INTM268010 to INTM268050] | |
Self assessment
Where non-residents are chargeable in the UK, Self Assessment (IT or CT) applies. Personal Tax International (part of Charity, Assets and Residence) is usually the HMRC office for a non-resident individual. Non-resident companies with permanent establishments in the UK are required under the Companies Act to register with Companies House. For a shortcut to the guidance booklet on the Companies House web-site see https://www.gov.uk/government/organisations/companies-house. A notification of registration of a branch will come from Companies House to the HMRC office covering the registered office address in the UK. That office will usually be the responsible office for the non-resident company.
Other relevant guidance
Other related sections of guidance on taxation of non-residents that you may be interested in are:
- Taxation of non-resident landlords on income from UK properties - SALF703
- Taxation of non-residents on income from employment in the UK - EIM35000+
- Taxation of non-residents on investment income arising in the UK - SALF706
- The differences in treatment between resident and non-resident companies - CTM34230