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HMRC internal manual

International Manual

Non-residents trading in the UK: permanent establishment: domestic and treaty law: fixed place of business: ‘place of business’ condition

Fixed place of business permanent establishment – place of business condition

There must be a place of business being used for carrying on the business of the enterprise. The place could be premises, facilities, plant or machinery or even a site or installation. But equally the place of business could consist only of a space where premises are not necessarily required for the activities concerned.  The key is that a certain amount of space is ‘at the disposal’ of an enterprise.  Consequently a place of business may be constituted by a pitch in the market place or a place of business of one enterprise could be situated in the business premises of a second enterprise, including an affiliated company, if some space were put at the disposal of the first enterprise.

In considering whether a place of business is ‘at the disposal of’ an enterprise it makes no difference whether that enterprise’s use is exclusive or shared, whether the enterprise owns, rents or even occupies a place illegally.

It is worth pointing out that in the example of, say, a travelling salesperson who visits a number of prospective clients, although the salesperson will not have a fixed place of business (as the clients’ premises are not at the disposal of the enterprise for which the salesperson is working) there may still be a permanent establishment if the conditions for dependent agent permanent establishment are met (see INTM264500). 

The Commentary at Article 5 lists a number of further examples which help illustrate the ‘place of business’ principle.