IEIM721110 - Practical Application of Rules for UK Permanent Establishments

HMRC anticipates that most intermediaries who have to report in the UK will do so as a result of being resident in the UK, carrying on a trade in the UK through a permanent establishment, or being governed by or incorporated under UK law.

Where a non-UK overseas firm carries on a trade through a permanent establishment in the UK, the firm may be a UK intermediary by virtue of its permanent establishment under Regulation 3 (1)(a) and will have an obligation to report where it carries on any of the activities of an intermediary in relation to a CRS avoidance arrangement or opaque offshore structure. However, HMRC would not generally consider all the activities of the firm that are not part of the activities of the permanent establishment to be within the scope of the Regulations. Thus, advice provided by the non-UK, non-EU overseas firm that was not connected with the business of the UK permanent establishment would not bring the firm into scope as an intermediary.

However, this would not apply if there was an attempt to circumvent the Regulations, for example by channelling the provision of advice by the UK branch through the overseas firm, or by splitting knowledge between the UK branch and the overseas firm in such a way that the UK branch could not identify that an arrangement was reportable.