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HMRC internal manual

International Manual

From
HM Revenue & Customs
Updated
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Non-residents trading in the UK: 'Machinery' provisions for assessment and collection via UK representatives: What other obligations does the UK representative have?

The machinery provisions impose upon the UK representative all of the non-resident’s obligations and liabilities under the Taxes Acts in so far as they arise from the permanent establishment / branch or agency of which they are the UK representative. This goes further than the obvious self assessment returns and payments but includes also provision of information, employer responsibilities and anything else required by the Taxes Acts including all subordinate legislation.

The rules recognise however that, where the UK representative is an ‘independent agent’ (see INTM264080), the agent can only provide complete information about the affairs of the non-resident to the best of their own knowledge and belief. The machinery provisions therefore specifically limit the extent of an independent agent’s responsibility concerning information notices, criminal and civil offences and / or penalties.

Whilst an independent agent need only provide any information requested, for example a return, to the best of their knowledge and belief, they must take all reasonable steps to obtain correct information. Also, the non-resident remains responsible for completing or correcting the information where necessary and can correct any error or omission made by the UK representative provided the non-resident did not know about it or participate in it. For example, a non-resident company fails to notify that it was liable to UK corporation tax in respect of its trading in the UK through an ‘independent agent’. Where that independent agent had sufficient information to know that a return was required but did not make one then the agent will be liable for a penalty under FA98/SCH2/PARA2 as if the obligation to notify the chargeability under the Taxes Acts had been their own.

The UK representative cannot commit an offence under the machinery provisions as a result of something done by the non-resident unless the UK representative either committed the offence themselves, consented to its commission or connived in its commission. The same applies for the non-resident in relation to the acts of the UK representative.