INTM262210 - Non-residents trading in the UK: Is there a charge under domestic legislation: Trading in the UK: Introduction

As far as ‘trading in the UK’ is concerned, the general guidance on whether a person’s (whether resident or non-resident) activities actually constitute trading is at BIM20050+.

This guidance concentrates on whether the non-resident’s trade has been carried on in the UK. There is a distinction between trading in the UK and trading with the UK. Trading by non-residents with the UK (e.g. purchases or delivery), as opposed to in the UK, does not bring the non-resident within the UK domestic charging provisions.

Whether considering income tax or corporation tax, trading in the UK is a prerequisite to the existence of a UK charge:

• ITTOIA05/S6(2) The profits of a trade, profession, or vocation carried on in the UK by a non-resident are chargeable to Income Tax.
• CTA09/S5(2) - A company not resident in the UK is within the charge to corporation tax only if it carries on a trade in the UK through a permanent establishment in the UK.

We therefore need to consider closely just what the concept of trading in the UK implies. Trade is a technical area with a wealth of case law, some relevant specifically in the context of whether a trade had been carried out in the UK.

Technical/specialist responsibility on whether particular activities amount to a trade belongs to the Business Profits team (part of BAI) with guidance at BIM20050+. The concept of trading by a non-resident goes a stage further by requiring consideration of whether the trade has been carried on in the UK.