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HMRC internal manual

Double Taxation Relief Manual

HM Revenue & Customs
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Non-residents: UK income: Agents

Although a non-resident enterprise may not have a permanent establishment in the United Kingdom in accordance with the normal definitions, a person who is a dependent agent of the enterprise may create a permanent establishment. A dependent agent may be an individual or a company, but such an agent must have authority, and habitually exercise such authority, to conclude contracts in the name of the enterprise. Such contracts must relate to operations which constitute the proper business of the enterprise, for example contracts for sale in the case of a merchanting business.

An independent agent, such as a broker or general commission agent, cannot constitute a permanent establishment of a non-resident enterprise if he is independent of that enterprise both legally and economically and acts for the enterprise in the normal course of his business. However, a commission agent who sells goods on behalf of an enterprise and has, and habitually exercises, an authority to conclude contracts, may be acting outside the ordinary course of his business and therefore be a permanent establishment of the enterprise.