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HMRC internal manual

Double Taxation Relief Manual

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HM Revenue & Customs
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Non-residents: UK income: Independent personal

The income derived by a non-resident from his independent personal services in the United Kingdom is dealt with on the same lines as the business profits of a permanent establishment of a non-resident enterprise (see DT1726 onwards). Although the Article is mainly concerned with individuals who carry on a profession, it can also be relevant to an individual who carries on a trade. The non-resident is taxed in the United Kingdom on the profits attributable to a fixed base in the United Kingdom (see DT219).

The provisions of the independent personal services Article are similar to those for the business profits Article and rest on the same principles as those of the business profits Article. The provisions of the business profits Article and the OECD commentary thereon can therefore be used as guidance for interpreting and applying the independent personal services Article. Hence the principles laid down in the business profits Article as regards allocation of profits between head office and permanent establishment could be applied in apportioning income between the State of residence of a person performing independent personal services and the State where such services are performed from a fixed base. Equally, expenses incurred for the purposes of a fixed base should be allowed as deductions in determining the income attributable to a fixed base in the same way as such expenses incurred for the purposes of a permanent establishment.