Self Assessment for Non-UK Resident Company Owners: All you need to know

Ryan Patrick

• 10 min read
Self Assessment for Non-UK Resident Company Owners: All you need to know

People ask if you need to register for any tax or self-assessment as a non-UK resident who owns a business or is a director of a company. The answer depends on the type of income you receive from your company as a company owner or director.

What is Self Assessment

All income must be taxed, self-assessment is a service that allows directors, company owners and shareholders to pay tax on their untaxed income received. In this case, the income received by these persons is not registered under the payroll so they have to report to HMRC of their earnings alongside when they receive it so they can pay taxes on that income.

Failure to register for self-assessment as a self-employed person or someone receiving an untaxed income in the UK might lead to tax penalties or other financial sanctions.

HMRC gave an official statement that all directors of UK-based companies are required to register for self-assessment and file their annual tax returns. However, this does not apply if

  • The income they receive from the company is taxed under Pay As You Earn (PAYE)
  • All the earnings they receive from the company are taxed

As a director in a UK-based company, you do not need to register for self-assessment if your payment from the company comes as a salary and is under a payroll. If your salary is over £150, 000, it will not come as a salary and then you can register for self-assessment.

However, if you receive untaxed income as a director or company owner in a UK-based company, you must register for self-assessment and file an annual tax return. You are to register for self-assessment if

  • You receive dividends as a shareholder in a UK-based company
  • You receive a director's loan
  • Interests and other finance receipts from banks and building societies

As a non-UK resident registering for tax returns, you are to register using the form SA100 and the form SA109 to declare that you're not a UK resident, after doing this, HMRC will treat this untaxed income as disregarded for tax purposes.

When your tax calculation is being made by the self-assessment system, two calculations will be available. One calculation will include the disregarded income and the other will not include the disregarded income. Between the two tax calculations, the one with the lower value will be your tax liability.

And then you can declare your untaxed income from the UK to your country of residence is untaxed and pay any tax to the relevant authorities in your country of residence.

What if HMRC Asks Me To File s Tax Returns

As a director, when you receive a notice from HMRC to complete your tax returns, then you must file a tax return. If you believe there was a mistake or error and the notice is not meant for you, you can contact HMRC for an explanation or to withdraw it. If HMRC declines your request to withdraw the notice, then you must file for self-assessment and file your annual tax returns.

What You Need to Register for Self-Assessment

To register for self-assessment, you need to get all your information ready. If you already have a unique taxpayer number, you can go ahead with the other processes but if you don't have any, you need to get one. To register for self-assessment you need to have your full name ready in the correct order and the name should be your official name.

Your residential address is also important when applying for self-assessment. Make sure to use your present residential address and if you move after registering for self-assessment, you can change your address on your tax account. Your residential address is where you receive the necessary information from HMRC regarding your registration for self-assessment.

A functional email address is also very important. Do not use a dormant email address to register for self-assessment in case you receive your activation code and then your email cannot be accessed.

If you have ever changed your name(s), you need to input the previous name and the date it was changed in the application form. Do not use any wrong information as it may become an error during processing or your application might get declined.

How to Register for Self-Assessment as a Non-UK Resident

The process of registration of UK residents and non-UK residents for Self Assessment is the same. As a company owner or director, you can choose to register electronically or fill out the SA1 form and send it by post to HMRC.

Applications both online and through post are all free, though online application saves you a lot of stress because it is easier, more secure and faster.

The steps required to register for Self Assessment with HMRC even as a UK non-resident are explained below

1. Set up an online account with HMRC

To set up an account, you have to visit the HMRC online platform, tap on the 'sign in' option and then 'create a sign in details'. You can only create a sign-in detail if you're a new user of the government gateway. If you're an old user, you just have to log in to your account and proceed.

As a new user, you'll be asked to do the following

  • Provide an email address
  • Confirmation of email address by inputting the confirmation code sent by HMRC to your email address
  • Input your full name in the correct order
  • Create a strong password

Take note of the Government Gateway user ID shown on your screen. Each time you want to sign in to the HMRC online platform, you will need your Government Gateway ID. This account is your account and you can use it to file your annual Self Assessment tax returns, check your tax records, and update your tax details.

2. Sign in to your account

Using this address online.hmrc.gov.uk/shortforms/form/SA1 sign in to your HMRC personal account. To sign in, you have to input your Government Gateway user ID and the password you created during registration.

After successfully signing in, you will see a form to fill out and complete. The name of the form comes as 'Registering for Self Assessment and getting a tax return'.

3. Complete the registration form

To complete the form, you must enter all required information correctly to avoid errors or delays in processing your application.

Information needed to complete the form included

  • Your title, first name and surname
  • Any previous name(s) you used and the date you changed it(if applicable)
  • UK National Insurance number
  • If you have no UK insurance number, the reason for not having the national insurance number
  • Your personal Unique Taxpayer Reference (UTR), only applies if you have previously registered for self-assessment sometimes in the past
  • Date of birth
  • Residential address
  • The date you moved to your present address
  • Telephone number
  • Email address
  • After filling in all this information, you will need to specify to HMRC why you are applying for self-assessment by ticking the box that applies to you. You have to select between 'i and a company director ' or 'I have untaxed income which cannot be coded in PAYE '
  • The date the untaxed income you're registering was received
  • There is a declaration form at the end of the form which you should carefully go through and check the box to indicate your agreement to the terms
  • Input your full name alongside the date you're registering, then two on the 'next' which is located at the bottom right-hand side of the screen

Once you've tapped on next, a summary page will appear which will show you all the details you previously entered. You have to carefully check this summary page for mistakes or errors in the information you inputted.

If you find a mistake or error you want to change, you just have to tap on 'back' and change it but if you do not notice any mistakes, you can tap on 'submit' to finally send your form to HMRC.

After submitting your application with HMRC, HMRC will send a 12-digit activation code (for your new tax account) and a 10-digit Unique Taxpayer Reference. These two pieces of information will be sent separately to your home address within 21 working hours of your residing in the UK.

If after 21 days you do not receive your activation code, you can check on your account online for when to expect your activation code from HMRC.

To check for your Unique Taxpayer Reference on your account online, you need to log in to the HMRC app and get it there. Your UTR is very important and is used to identify your self-assessment so it should be kept very safe.

4. Activation of Self-Assessment

After receiving your activation code, you will have to sign in to your account and activate your self-assessment service using the code. Once your self-assessment service is activated, you can file your tax returns at the end of every tax year. You only have to file untaxed income.

Registration of Self-Assessment by Post

If you are unable to register online or prefer to register by post, you can easily do this by applying for Self-Assessment using the form SA1. The information needed for registration by post is the same as in registration online. You have to print the complete form, sign it and date it.

After you have filled out the form, you can post it to the following address

  • HM Revenue and Customs
  • NIC&EO
  • BX9 1AN

Filing a Self-Assessment Tax Return as a Non-UK Resident

Once you have successfully registered for self-assessment, you are mandated to send your tax returns to HMRC at the end of every tax year in which you receive an untaxed income. You can either send your annual tax returns online or by post.

  • For online filing, the deadline for Self Assessment tax returns filing is 31 January
  • For post-filing, the deadline for self-assessment tax returns filing is 3 months earlier from 31 October

This means that if you have received an untaxed income in a particular tax year, you must send your self-assessment tax returns to HMRC by 31 October if you're filing by post and 31 January if you're filing electronically.

To file an online self-assessment tax return, you just sign in to your tax account with your Government Gateway ID and your password.

Once you have successfully signed in, you have to navigate to the self-assessment section and click on 'Complete your tax return'. There are simple explanations concerning each section which will be provided on screen. Below is the step-by-step process of filing an annual tax return for self-assessment electronically

Step 1 Input all your details including your name(full name), your current residential address and your date of birth.

Step 2 Answer correctly the questions presented to you about your tax returns. You should ensure to only fill the self-assessment returns part that applies to you(as a company director or a random untaxed income).

Step 3 Now you have succeeded in specifying the self-assessment returns that apply to you, you have to fill in your returns. This is the main section of the self-assessment returns filing. You will provide details of the income you're reporting for tax. The income might be in the form of dividends as a shareholder, interest received payment to a registered pension scheme or overseas pension scheme, allowable expenses or any other form of income.

If you receive a salary as a director in your company, you must file and complete the 'Employment SA102 supplementary page on the filing to record your income.

You must also complete the 'Residence, remittance basis or others (form SA109)' supplementary pages to repost your residential status on your tax returns. Since you're a non-UK resident, you can claim personal allowances.

Other pages are also available and you must fill them in if they apply to you. For example, if the income is received from rent paid for a UK property, you have to file a tax return.

Step 4 Once you have completed your tax return, you have to carefully go through the information to ensure you entered everything in the correct order. If you find any mistakes in the information, you can go back and correct them but if you do not find any errors, you can proceed.

Step 5 You have to view your tax calculation to know if you owe any tax and if you owe, how much you owe. If you owe a tax, enable you to pay it up.

Step 6 If you're done verifying your information and tax calculations, you can then save a copy of your tax return for record-keeping and then proceed to submit your annual tax return.

To submit your tax return, you need your Government Gateway ID and password to submit. Once your filing has been successfully received by HMRC, you will receive a confirmation message notifying you that your tax returns have been successfully received by HMRC.

If you cannot send in your annual tax return electronically, you can opt for filing by post. To file by post, you need to call HMRC to request the paper version of the form SA100 for tax return. If you completed the form and want to send it, you can send it by post directly to HMRC if you live in the UK.

However, if you live outside the UK, you can send your completed tax return paper to any of the following addresses

  • HM Revenue and Customs
  • Benton Park View
  • Newcastle Upon Tyne
  • NE98 1ZZ
  • United Kingdom

You also need to submit very early to allow for reaching HMRC by 31 October which is the deadline for filing tax returns by post. If your tax returns arrive at HMRC later than 31 October, you may receive a penalty for late filing.

If you owe any tax or have outstanding debts from self-assessment tax, you must ensure to pay it or else there will be accumulating charges on the tax you owe. The filing deadline for the tax you owe is the same as the deadline for filing a new tax.

Conclusion

Paying tax is very important and as a non-UK resident who owns a company, directors or is a shareholder in a UK-based company, you need to pay taxes. The tax also applies if you receive payment from any property in the UK even if you're not in the UK.

Registration for self-assessment is very essential and when you receive a notice to file for self-assessment, you should register and file your tax returns as soon as possible to avoid penalties which can come as financial penalties.

Late filings also attract penalties and tax debts attract extra charges as long as you don't pay the tax. Filing your tax return should be done carefully to avoid any errors and you must make sure to give the details of the income you are reporting for self-assessment. If you have multiple sources of untaxed income, you must report all of them and pay taxes for all. Do you have any questions about Self Assessment for non-UK resident company owners? Kindly contact one of our Incorpuk experts for help today.