Record keeping under the statutory residence test

Record keeping has always been an essential part of documenting a person’s residence position, and the statutory residence test (SRT) while giving more certainty about your residence position does put in place a more rigid structure which only increases the need to keep proof and more detailed records.

As with all tax situations it’s all about the “story” you build up over a period of time and the more documentary evidence you have to back this up the better, there is no set rule of what you must and must not keep its mainly down to common sense.  In the UK we operate a self-assessment system of taxation so what you tell the tax man is what you pay tax on, until he decides to investigate and then you have to back up your claims with the hard facts.  The better these are the easier it will be, if you can’t satisfy the tax man you will have to satisfy the various courts who will decide in the end, in the case of dispute.

The main record keeping matter is days of presence in the UK or days of absence from the UK.   This area in fact has not changed much in spite of the new rules.  The basic requirements are to show where you were on any given day.  Your passport is obviously your first primary document with various stamps of entry and exit.  However not all countries provide stamps on all passports so back up documentation is needed this may include: -

• Tickets and boarding passes
• Mobile phone bills
• Credit card statements
• Accommodation receipts and bookings

Another situation where record keeping is vital is where you spend time in two or more properties one in the UK and the other overseas and have to determine which property is your home, a recurring concept in the SRT.  In this case you are required to prove on only the substance of your use but also the quality of use, as your home could be the one you spend less time in! With a home its more about proving quality therefore the proof list is extensive but the more you have the better some examples are: -

• Where your post is sent
• Where you are registered for a Dr
• Club memberships and subscriptions
• Local parking permits 
• Level of utility bills
• Where your family are
• Lifestyle purchases

The above is a brief list and many more items could be used, but you are trying to show where the emotional centre of your life is.

The above are just two situations that arise you will also need to keep records of your work situation and where you were working on any given day.  This will entail be able to draw on contemporaneous records, in most cases a diary will be a good start, but again the more back up information you have the better.

In short the better your records the better your chances of coming through any investigation.

Services we offer

We are pleased to able to offer the following taxation based services: -

All taxation services are arranged on a fixed fee basis with the fee to be charged agreed in advance of any work being undertaken.

• A General tax consultation and/or specific tax advice;
• Tax planning for your general situation or for a specific transaction;
• Registration for National Insurance and Unique Tax Reference numbers;
• Preparation and submission of annual self-assessment returns;
• Preparation and submission of return for overseas landlords;
• Formation of UK and offshore companies in respect to an acquisition of the commercial property and administrative and accounting services for corporate entities.

For all questions regarding your business in the UK and tax planning, please contact our Business Consultancy team at Law Firm Limited on +44 (0)20 7907 1460 or via email