Setting up in the UK ― branch or subsidiary

Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance

Setting up in the UK ― branch or subsidiary

Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance
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A company doing business in the UK may initially undertake activities without a taxable presence in the UK.

However, where activities will actually be undertaken in the UK, the parent should consider whether to set up in the UK through a branch (which will usually be treated for tax purposes as a permanent establishment (PE)), or a subsidiary.

An overseas company may also acquire a UK PE without intending to do so. Where the business in the UK develops to the point that the company has a fixed place of business in the UK through which the business of the company is carried on, it will have a PE. The company may also acquire a UK PE through a dependent agent. For chargeable periods beginning on or after 1 January 2026, it can arise where a person acting on behalf of the company habitually concludes contracts, or habitually plays the principal role leading to contracts that are routinely concluded without material modification by the company. For chargeable periods beginning before

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