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HMRC internal manual

International Manual

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

Agency permanent establishment

If there is no fixed place of business permanent establishment you could consider whether the activities in the UK amount to an agency permanent establishment under domestic law. It is not necessary to consider this test if there clearly is a fixed place of business.

The statutory definition at CTA10/S1141(1)(b) treats as a permanent establishment:

“…an agent acting on behalf of the company where the agent has and habitually exercises here authority to do business on behalf of the company. As long as that agent is not of independent status acting in the ordinary course of his business.”

The first sentence of that definition is interpreted widely. However, in both CT and IT cases the non-resident is still required to be trading in the UK before the domestic charge to tax can apply. And of course the potential impact on the domestic charge of any applicable treaty agency PE provisions (INTM266020.) would need to be considered. The OECD Model Treaty definition is drawn more narrowly because it requires the agent to exercise authority to enter into contracts. The exclusion of independent agents is covered in more detail at INTM264080.