HMRC has updated its guidance on how individuals and organisations can apply for a certificate of residence or letter of confirmation to prove UK tax residence.

A certificate of residence can be used to claim tax relief in another country where UK residents pay tax on foreign income. It confirms to the overseas tax authority that the applicant is UK resident. A certificate can be issued where there is a double taxation agreement with the country concerned and the applicant is entitled to treaty benefits.

A letter of confirmation may instead be appropriate where there is no double taxation agreement or proof of UK residence is required for another purpose. The overseas tax authority decides whether relief from foreign tax can be granted.

The online service is available to individuals and sole traders, companies, partnerships, trusts, charities, public bodies, pension schemes and collective investment schemes. Agents can also apply directly on behalf of taxpayers.

Applicants need to provide details including the country the certificate is required for, the relevant double taxation agreement, type of income and period covered. A future date cannot be requested.

Further information is required where a tax return has not yet been filed, including days spent in the UK days during the tax year or years where a certificate is required. 

HMRC has clarified how employers can handle benefits in kind for globally mobile employees as mandatory payrolling is introduced from April 2027.

Under the new rules, most benefits in kind will have to be reported through payroll rather than on annual P11D forms. The first phase, starting on 6 April 2027, covers company cars, vans, fuel and medical benefits. Other benefits will generally follow from 6 April 2028, although loans and employer-provided accommodation are excluded and remain voluntary.

HMRC has now confirmed that employers will be able to choose to exclude globally mobile employees from mandatory payrolling from 6 April 2027. A new online service is expected to be launched in November 2026 for employers to choose this option. Where globally mobile employees are excluded, employers should continue using the existing year-end reporting arrangements, including forms P11D and P11D(b).

The change recognises the additional difficulties employers can face when calculating benefits for employees who work across different countries or move during the tax year. HMRC is expected to publish more detailed guidance on the changes later this year.

Employers with globally mobile employees should review their arrangements ahead of the changes and consider whether excluding these employees from mandatory payrolling would simplify their reporting. If you need help understanding the new rules or reviewing your payrolling arrangements, we can help.

UK taxpayers with income from overseas may not always be aware of the tax rules that apply.  Foreign income is defined as any income from outside England, Scotland, Wales and Northern Ireland. The Channel Islands and the Isle of Man are classed as foreign. Different rules may apply if you’re eligible for Foreign Income and Gains relief.

Foreign income can include wages from working abroad, overseas dividends and savings interest, rental income from foreign property, and pensions held outside the UK.

Whether UK tax is due depends mainly on your UK residence status. If you are not UK resident, you will not usually pay UK tax on your foreign income. However, UK residents will generally need to pay tax on worldwide income unless a specific exemption or relief applies.

Since 6 April 2025, changes to the rules affecting individuals who previously relied on their overseas domicile status mean that some people may need to review how their foreign income and gains are taxed. Eligible individuals may be able to claim Foreign Income and Gains (FIG) relief, depending on their circumstances.

Foreign income that is taxable in the UK is normally reported through a self-assessment tax return, although some types of income have different rules.

If the same income is taxed in both the UK and another country, you may be able to claim relief to prevent double taxation. In some cases, you may need a certificate of residence from HMRC to confirm your entitlement to relief.