B1.402 Overseas trading
For a non-resident to be chargeable to tax on trading income, it is necessary that he should exercise a trade within the UK, as distinct from being engaged in trade with this country. Accordingly, the mere seeking of orders within the UK is not by itself evidence of the carrying on of a trade within the UK; and that is so whether the obtaining of orders is by the principal's coming over here and doing it himself, or by his having an agent here to do so1.
The question whether a non-resident is carrying on a trade within the UK is a question of fact, which has to be answered after a review of all the facts. Early case law indicated that one of the most important factors is the place where the contracts for the sale of the goods or the rendering of the services in question are made2. These cases found that, in general, if the contracts are made in the UK, a trade is being carried on within this country; but if the contracts are made abroad, it may be possible to show that no trade is being carried on within the UK3.
If, for example, the trader himself comes to this country and solicits and accepts orders here, he carries on a trade within the UK even though the goods are consigned from abroad direct to customers here; the fact that the foreign trader has a del credere agent4 here does not prevent HMRC