Originally Posted by
donard
There are though two other possible reasons. I am not sure how valid they are.
When visiting the UK (I am a dual citizen too) I will be using my Canadian driving licence. If I was resident in the UK I would be expected to have a UK driving licence. By having a stamp showing UK arrival, it shows that I came in to the UK using my Canadian passport - and so am probably not resident in the UK. However, despite renting frequently in the UK and Ireland, I have never been queried when supplying my Canadian licence and credit card (with a Canadian address)
There are possible tax implications if you spend a substantial amount of time in the UK. By having multiple entry stamps (they do not stamp on exit) you are showing you enter multiple times, rather than just go to the UK and stay there - which could make you liable for tax as a UK resident (different from citizenship).
In my experience I've never encountered an issue with renting cars. I frequently rent cars back in the UK with my British driving licence even though I haven't lived there in over 3 years. Equally, Mrs Schmidt rents them in the US with her UK driving licence despite having entered the US on her US passport - also never an issue.
Also, using another passport to enter the UK will not help you escape UK tax liabilities, though it may make it easier to hide you overstaying the number of days that make you liable for paying British tax.