Understanding UK Fiscal Residence and getting a CoR (Certificate of Residence)

The concept of fiscal residence is fundamental for determining a person’s tax obligations in the UK. Fiscal residence refers to the country in which an individual is considered a resident for tax purposes. The UK's tax system requires individuals to determine their tax residency status to understand their tax liabilities accurately. This article will provide a comprehensive guide on UK fiscal residence, the different ways to prove residency, and how to obtain a certificate of fiscal residence. Additionally, we will explain the significance of the EN5000 form, which is sometimes requested by some European countries such as France in certain tax situations.

Determining UK Fiscal Residence

The primary legislation governing tax residency in the UK is the Statutory Residence Test (SRT), introduced in the Finance Act 2013. The SRT is a set of rules that determine whether an individual is a UK resident for tax purposes. The SRT is divided into three parts: the automatic overseas test, the automatic UK tests, and the sufficient ties test.

1. Automatic Overseas Test:
   • You are automatically non-resident if you spend fewer than 16 days in the UK in the tax year, provided you were a UK resident in one or more of the previous three tax years.
   • You are also non-resident if you spend fewer than 46 days in the UK in the tax year and were not a UK resident in any of the previous three tax years.
   • If you work full-time overseas and spend fewer than 91 days in the UK, with no more than 30 of those being workdays, you are non-resident.
2. Automatic UK Test:
   • You are automatically a UK resident if you spend 183 days or more in the UK in the tax year.
   • You have a home in the UK for more than 90 days and are present in that home for at least 30 days during the tax year.
   • You work full-time in the UK for 365 days, with no significant breaks.
3. Sufficient Ties Test:
   If neither of the above tests conclusively determines residency, the sufficient ties test considers various factors, such as family ties, accommodation ties, work ties, UK presence in previous years, and country ties. The combination of these factors, along with the number of days spent in the UK, determines residency status.

In most instances being deciding if you are UK resident is quite straightforward, especially if you qualify for one of the automatic UK test rules. But they are cases where it can be tricky to decide. Please check our detailed article on the Statutory Residence Test for more details.

Proving UK Fiscal Residence

To prove UK fiscal residence, individuals may need to provide evidence of their residency status to HM Revenue and Customs (HMRC) or other financial institutions. The following documents are commonly used to prove UK fiscal residence:

1. Utility Bills and Rental Agreements: Utility bills (electricity, water, gas, etc.) and rental agreements with your name and UK address can serve as proof of residence.
2. Bank Statements: UK bank statements showing regular transactions and your UK address are useful evidence.
3. Council Tax Bills: A council tax bill for your UK property is a strong indicator of residency.
4. Employment Records: Employment contracts, payslips, and letters from employers based in the UK can support your claim.
5. Healthcare Records: Registration with a UK General Practitioner (GP) and records of medical appointments in the UK.
6. HMRC Correspondence: Any official correspondence from HMRC, such as tax returns or notices of coding, supports residency claims.

Obtaining a Certificate of Fiscal Residence

A Certificate of Fiscal Residence (CoR) is an official document issued by HMRC confirming an individual’s tax residency status in the UK. This certificate is required to claim tax relief under double taxation agreements. Here are the steps to obtain a CoR:

1. Eligibility: Ensure you are a UK resident as determined by the SRT (see above).
2. Application Form: Complete the appropriate application form, which can be found on the HMRC website. The form is called ‘Form RES1’ for individuals. You can do it online or by post.
3. Supporting Documents: Gather supporting documents such as those listed above (utility bills, bank statements, etc.).
4. Submission: Submit the completed form and supporting documents to HMRC. This can usually be done online through the HMRC website or by post.
5. Processing Time: HMRC will review your application and documents. Processing times can vary, but it generally takes a few weeks.
6. Receiving the Certificate: If approved, HMRC will issue the Certificate of Fiscal Residence, which you can use to claim tax relief abroad.

Please note that a CoR will only be issued when the benefits of a double taxation treaty are claimed. The HMRC will check your residence status and ensure that you are entitled to the benefits you are claiming. Only then will they issue the certificate.

In some instances, for example when an individual is required to provide evidence to an overseas authority that they are resident in the UK for tax purpose to meet a requirement of an overseas countries local law, then they will issue a Letter of Confirmation of Residence instead. If the request is not for tax purposes, they will not issue such a letter either and you will need to contact the overseas authorities to determine what they will accept.

The EN5000 Form (as requested by France)

In certain instances, some countries might request their own paperwork. French tax authorities for example are notorious to require you to fill in an EN5000 form to verify your fiscal residence. The EN5000 is a specific form used within the European Union for tax purposes. It serves as a certificate of fiscal residence issued by the tax authorities of an individual’s home country.

Purpose of the EN5000 Form

The EN5000 form is used to:

• Confirm that an individual is a tax resident in the UK.
• Facilitate the application of double taxation agreements.
• Ensure that income is taxed appropriately in accordance with international tax treaties.

Obtaining the EN5000 Form

To obtain the EN5000 form:

1. Contact HMRC: Reach out to HMRC and request the EN5000 form for the relevant tax year. You can also download it from the Internet site of the French Embassy.
2. Complete the Form: Provide necessary information such as your personal details, tax reference number, and details of your tax residency status.
3. Submit to HMRC: Post the completed form to HMRC for certification. You should post it to your PAYE office. They will verify your tax residency status and complete their section of the form.
4. Receive the Certified Form: Once HMRC has certified the form, it will be returned to you. You can then submit this form to the French tax authorities as required.

This process is a lot more hazardous than the HMRC CoR route however as the process is not automated and it's quite frequent that applications get lost. Because there is no way to chase up HMRC your only option then is to try again.

Conclusion

Understanding and proving UK fiscal residence is crucial for ensuring accurate tax reporting and compliance with HMRC regulations. The Statutory Residence Test provides a clear framework for determining tax residency status. By providing adequate proof of residence and following the steps to obtain a Certificate of Fiscal Residence, individuals can effectively manage their tax obligations and take advantage of relevant tax treaties. As for the EN5000 form , it is often required by European countries such as France and plays a important role in facilitating cross-border tax matters between the UK and France, ensuring that tax is paid appropriately and preventing double taxation.