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HMRC internal manual

International Manual

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 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