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HMRC internal manual

International Manual

Non-residents trading in the UK: domestic law permanent establishment/branch or agency

Non-resident companies - charge to corporation tax - permanent establishment/branch or agency

A CT charge arises (see INTM262040) in respect of a non-resident company if its trade is carried out in any part through a permanent establishment in the UK. For accounting periods beginning before 1 January 2003 the domestic charge requirement was that the trade be carried out through a branch or agency in the UK. The change in terminology to permanent establishment was part of the changes to taxation of non-resident companies introduced in FA2003. (The more significant change was the requirement for non-resident companies to attribute capital to the UK permanent establishment before interest could be claimed as a deduction from permanent establishment profits. For detailed guidance on this see INTM267120 to INTM267150.)