Withholding Tax

Withholding taxes (WHT) are when tax is withheld from (or deducted from the income due to) the recipient by the payer, and directly paid to the government. In most tax jurisdictions, withholding tax applies to employment income (think of PAYE) but some tax systems withhold tax on other forms of income.

Below you can find the current forms we hold on file for withholding tax and HMRC's Certificate of Residence. These are used so you do not get taxed twice on foreign income. Occasionally both are required to be sent to the customer/agent.

The University holds templates for certain countries’ Withholding Tax forms, which can be found below, along with Certificate of Residence letters. The Tax Team requests Certificates of Residence letters annually at the beginning of each year. If you require additional Certificates of Residency please let the Tax Team know.

The University aims to put measures in place to prevent tax being withheld by overseas countries’ tax authorities.

Withholding tax (WHT) risks:

• A cost to the University and its projects – different rates of Tax are different for each country. The University may receive less income than expected
• Duration of processing refunds are greater than the Tax simply being withheld by the Customer. In some instances the refund can take as much as a year to receive back from the tax authorities. To mitigate this delay, it is crucial to send the Customer the WHT form as soon as requested

Withholding Tax form process:

The department will need to download the WHT form and fill in the following information:

• Type of income: royalties, interest, dividends, services

• Description of income

• Customer/Agent's name, address, VAT/Tax number

• Amount of income

• Invoice/contract date may need to be included

• A copy of the contract may need to be included

• Money to be refunded by the other country’s tax authority – the Tax Team will fill in the bank details

Once the WHT is filled in by the department, this needs to be emailed to the Tax Team.

The Tax Team will mail the form to HMRC for them to sign some countries WHT forms do not need HMRC’s signatory, so, this step can be missed and be sent straight to the Customer (or that country’s Tax Authorities if a refund is sought).