HMRC NRL1 Form – Full Guide to the Non-Resident Landlord Scheme, How NRL1 Works, and How to Register as an Overseas Landlord

Understanding the HMRC NRL1 Form

The NRL1 form is the official HMRC form used by overseas landlords to register for the Non-Resident Landlord Scheme (NRLS). This scheme ensures the correct tax is paid on rental income from UK property when the landlord lives abroad for more than 6 months per year.

The NRL1 form allows overseas landlords to apply to:

• Receive UK rental income without tax deducted at source, OR

• Register with HMRC so that letting agents or tenants deduct the correct tax (if required)

Completing the NRL1 ensures compliance with UK tax law and helps landlords avoid incorrect deductions, penalties, or withholding.

This guide fully explains:

• What the NRL1 form is

• Who must complete it

• How the Non-Resident Landlord Scheme works

• Step-by-step instructions

• How tax is deducted (or not deducted)

• Letting agent and tenant responsibilities

• Correcting mistakes

• Common issues

• HMRC checks and compliance

• How Audit Consulting Group helps UK and overseas landlords

What Is the NRL1 Form?

The NRL1 is an HMRC registration form for individuals who:

• Own property in the UK

• Rent out that property

• Live outside the UK for more than 6 months a year

The purpose of the NRL1 is to inform HMRC that the landlord is non-resident and to determine how tax should be collected.

The form is used to request:

Permission to receive rental income gross (without tax deducted)

OR

Registration so HMRC can track rental income correctly

Without submitting NRL1, letting agents must deduct 20% tax before sending rental income to the landlord.

Who Must Complete the NRL1 Form?

You must submit the NRL1 if you are:

An individual landlord

(personal ownership)

Living outside the UK for more than 6 months

This includes:

• British citizens living abroad

• EU nationals with UK rental property

• Anyone relocating overseas

• Overseas workers

• Long-term travellers

• Digital nomads

Receiving rent from UK property

Even if:

• You make a loss

• You are repaying a mortgage

• The tenant pays rent directly to you

Planning to leave the UK soon

If you expect to become non-resident within the next year.

Who Does NOT Need the NRL1?

• UK residents renting UK property

• UK companies owning UK property (use NRL2)

• Non-resident companies (use NRL2)

• Non-resident trusts (use NRL3)

• Tenants who do not pay over £100/week

NRL1 is specifically for individual overseas landlords.

How the Non-Resident Landlord Scheme (NRLS) Works

The scheme ensures HMRC receives tax on rental income from UK property when the landlord is living abroad.

Two possible outcomes:

1. Landlord submits NRL1 → Receives rent WITHOUT tax deducted (gross payment)

When HMRC approves the NRL1:

• Letting agent pays rent in full

• No tax deducted at source

• Landlord pays tax through Self Assessment

• Landlord must submit annual UK tax returns

This is the preferred option for most landlords.

2. Landlord does NOT submit NRL1 → Tax is withheld (20% deduction)

If landlord does not register:

• Agent must deduct basic-rate tax

• Tenant must deduct tax if no agent and rent > £100/week

• Tax is sent to HMRC quarterly

This usually reduces cash flow and causes incorrect deductions.

Letting Agent Responsibilities Under the NRLS

Letting agents must:

• Register with HMRC if managing property for non-resident landlords

• Deduct 20% tax unless HMRC issues approval letter

• Submit NRLS quarterly reports

• Provide annual NRLS certificates to landlords

• Hold detailed rental statements

HMRC guidance for agents:
https://www.gov.uk/government/publications/non-resident-landord-guidance-notes-for-letting-agents-and-tenants-non-resident-landlords-scheme-guidance-notes

Tenant Responsibilities (If No Agent Is Used)

Tenants must deduct tax if:

• They pay rent directly to an overseas landlord

• Rent exceeds £100 per week

• Landlord is outside the UK

• No NRL1 approval exists

Many tenants don’t realise this and may accidentally break HMRC rules.
Audit Consulting Group helps correct mistakes.

How to Complete the NRL1 Form (Step-by-Step)

Step 1 – Confirm you are non-resident

Living outside the UK for over 6 months or intending to.

Step 2 – Gather required information

You will need:

• Full name

• Address abroad

• National Insurance number (if applicable)

• UK property address

• Letting agent details (if any)

• Date non-residence began

• Passport or ID details

• Tax residence country

• Tax identification number (TIN) abroad

Step 3 – Complete NRL1 online or by post

Online form:
https://www.gov.uk/guidance/apply-as-an-individual-to-receive-uk-rental-income-without-uk-tax-deducted

Step 4 – Submit the form

Submission options:

• Online

• Email (in some cases)

• Postal forms to HMRC

Step 5 – Wait for HMRC approval

Approval usually takes:

• 2–8 weeks

HMRC sends:

• Confirmation letter to landlord

• Copy to letting agent

Step 6 – Receive rent gross

Once approved, letting agents must stop deducting tax.

Documents Often Required (Varies by Situation)

HMRC may ask for:

• Proof of overseas address

• Copy of passport

• UK property ownership evidence

• Letting agent contracts

• Residency certificate

• Foreign tax identification number

• Previous Self Assessment records

We help prepare all documentation.

What Happens After HMRC Approves the NRL1?

You receive rent without tax deducted

You must submit a UK Self Assessment tax return

You must declare rental income to HMRC annually

HMRC may review your file periodically

Even with NRL1 approval, you must still pay UK tax on profits.

Do You Still Need to Pay UK Tax With an NRL1?

Yes.

NRL1 approval only removes withholding tax.
You must still declare:

• Rental income

• Mortgage interest

• Repairs

• Service charge

• Agent fees

• Allowable expenses

When You Must File a UK Tax Return

Even if rent is paid gross, you must file Self Assessment if:

• You rent a UK property

• You make over £2,500/year profit

• HMRC requires it

HMRC guidance:
https://www.gov.uk/self-assessment-tax-returns

How to Correct Errors on an NRL1

Common errors include:

• Wrong dates

• Incorrect residency status

• Landlord returning to UK

• Moving to a different country

• Letting agent changes

• Joint owners not both registering

Corrections are made via:

• Additional NRL1 submission

• Self Assessment adjustments

• Direct written communication with HMRC

We manage all corrections on behalf of landlords.

Common Problems with NRL1 and NRLS

For Landlords:

• Agents deduct tax despite approval

• HMRC delays

• Joint owners confusion

• Not filing tax returns after approval

• Tenants not deducting tax correctly

• Duplicate HMRC records

For Agents:

• Incorrect withholding

• Missed NRLS quarterly reports

• Penalties for non-compliance

• Not updating systems after HMRC approval

For Tenants:

• Failure to deduct tax

• Not registering as responsible tenant

• HMRC fines for non-compliance

Audit Consulting Group helps resolve all of these issues quickly.

Penalties for NRLS Non-Compliance

Penalties may apply to:

• Landlords

• Tenants

• Letting agents

Common penalties:

• Failure to deduct tax

• Failure to file NRLS returns

• Incorrect landlord status

• Deliberate non-compliance

We help negotiate penalty reductions.

Case Studies

Case Study 1 – Landlord Overcharged Tax

Client: Sarah L., Dubai
Issue: Agent deducted tax for 18 months despite NRL1 submission.
Solution: We contacted HMRC; refunds issued through Self Assessment.

Case Study 2 – Tenant Didn’t Deduct Tax

Client: Tenant in Manchester renting directly from overseas landlord
Issue: Non-compliance under NRLS.
Outcome: We arranged disclosure and avoided penalties.

Case Study 3 – HMRC Held Application for 12 Weeks

We intervened, provided documents, and obtained approval.

Case Study 4 – Joint Ownership

Couple owned property together. Only one had NRL1 approval.
We submitted NRL1 for second owner → compliance restored.

Frequently Asked Questions (FAQ)

Q1: What is the NRL1 form?

Registration form for overseas landlords under the NRLS.

Q2: What happens if I don’t fill in NRL1?

Letting agents or tenants must deduct 20% tax.

Q3: How long does approval take?

Usually 2–8 weeks.

Q4: Do I still pay tax with an NRL1?

Yes — through Self Assessment.

Q5: Can I submit NRL1 before leaving the UK?

Yes.

Q6: Is NRL1 needed for short holidays abroad?

No — only if you live abroad for over 6 months.

Q7: Do joint owners each need NRL1?

Yes — every owner must apply individually.

Official HMRC information:
https://www.gov.uk/tax-uk-income-live-abroad/rent