Tax Residency Certificate

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Hi,

May I please give a bit of background -

I am planning to provide marketing consultancy to a manufacturer based in India covering - client introduction & management, credit checks & payment follow ups, product development all for & within UK. The business will be done directly by the manufacturer & UK clients, ie orders sent straight to client & manufacturer gets paid directly by UK customers. My role is only to introduce & look after them in general & I am based in UK.

I plan to charge a retainer fee (fixed) & commission charges variable depending on volume of business, once business hits a threshold, after which commissions kick-in, so it will be in future.

My client (Indian manufacturer) has asked for a Tax residency certificate whether - for a company or as individual, depending on how I structure it, so that they can pay me.

I am seeking inputs on -
1. What will be the best way to do it as a company or individual
(prefer to do as a company in order to put thru expenses)

2. Is it easier to get tax residency certificate for a newly formed company or individual (if at all it matters or it doesn't matter).

I appreciate in advance all the help in this regard.

Regards,

RG.

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Shruti Sharma, on behalf of UK Trade & Investment India in Delhi, India.

Hi,

Apologies for a delayed response to your query.

Here are the answers provided by UKTI Financial & Professional Services Sector Lead in India.

1. The option as to set up a company or do it as an individual will depend upon various factors with each having its own set of pros and cons. Accordingly, you would want to check this specially with a UK advisory and tax consultancy firm on the best structure to be adopted.

2. The tax residency certificate is issued by HM Revenue and Customs on a case to case basis. You can reach out to your local tax officer at the HM Revenue and Customs for obtaining a tax residency certificate.

A company can apply for a tax residency certificate for claiming tax benefits under the Double Taxation Convention only if it is a resident of United Kingdom (UK). A company will be a resident of the UK if, it is liable to tax in the UK as per UK tax laws by reason of its domicile, residence, place of management, place of incorporation or any other criterion of a similar nature. A company can also be a resident in the UK if its central management and control is in UK or if it is incorporated in the UK.

An individual will require various details like the National Insurance Number, Unique Taxpayer Reference Number, length of stay in UK etc. for applying a tax residency certificate in UK.

Though the procedure for obtaining Tax Residency Certificate is different for a company and individual, the issuance of the certificate will be varied on case to case basis. However, you would want to check this specially with UK tax consultant, who may be able to provide you with specific advice.

For any further guidance or queries, you may wish to contact Neha Sampat, Senior Trade & Investment Adviser - Financial & Professional Services, UKTI India at Neha.Sampat@fco.gov.uk.

Regards,
Shruti

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