Tax residence and permanent establishment

Does my UK company create a permanent establishment in my home country?

Running a UK company mainly from your home country risks a local permanent establishment, giving that country a right to tax part of the profit.

Short answer

It can. If you regularly run the business, sign contracts or maintain a fixed base such as a home office in your home country, that country may treat your UK company as having a permanent establishment there, taxing the profit fairly attributed to that activity, alongside the UK's own charge.

Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.

What this means for your company

It can. If you regularly run the business, sign contracts or maintain a fixed base such as a home office in your home country, that country may treat your UK company as having a permanent establishment there, taxing the profit fairly attributed to that activity, alongside the UK's own charge.

01

Common triggers overseas founders miss

02

Reducing the risk

Common triggers overseas founders miss

Working daily from a home office, meeting clients locally, signing contracts on the company's behalf, or employing staff who negotiate deals in your home country are all classic fact patterns that create a permanent establishment risk, regardless of the company's UK registration.

Occasional remote work checking email is low risk; running the whole operation from one desk abroad, with the UK company existing mainly on paper, is high risk and is exactly the pattern tax authorities look for.

Reducing the risk

Genuinely separating strategic decisions, contract signing and core operational activity into the UK where possible, and taking local advice on your home country's specific permanent establishment threshold, since thresholds and exemptions vary significantly by country and by treaty.

Where a permanent establishment is unavoidable, registering for it properly and using treaty relief to avoid double taxation is usually far cheaper than an unplanned foreign tax authority assessment discovered years later.

What this costs with us

Our fixed monthly packages for a UK limited company start at £89 plus VAT and run to £169 and £289 plus VAT as bookkeeping, VAT, payroll and reporting are added. One-off filings are sold at fixed prices, and the Companies House fees we pay for you are charged at cost with no VAT added. Overseas owners are quoted on exactly the same published prices as UK-resident clients.

Before you act

Rates, thresholds and deadlines here reflect the 2026/27 UK position and current Companies House and HMRC guidance. Check GOV.UK, or ask us, before relying on them for your own company.

Primary references

Official sources and further reading

Related answers

More on tax residence and permanent establishment

Every answer in this cluster is written for UK limited company directors and reviewed against current HMRC and Companies House guidance.

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Talk to a limited company accountant near you

We work with company directors across London and Surrey from our office at 12 London Road, Morden, London SM4 5BQ. Pick your area, or send the form below and we will call you back.

Frequently asked

Does my UK company create a permanent establishment in my home country?: questions directors ask

Is this the same question as company residence?

No, a company can avoid full residence abroad yet still have a local permanent establishment there.

Does the answer depend on my home country's law?

Yes, entirely; UK advice cannot confirm the foreign tax authority's position on your specific facts.

Does a single client visit create one?

Unlikely on its own, but regular, ongoing local activity is the pattern that does.

What records are needed for does my uk company create a permanent establishment in my home country?

Keep bank statements, sales and platform reports, purchase invoices, payroll records, VAT workings, finance agreements and Companies House correspondence. We confirm the exact list at onboarding and identify gaps before a filing deadline becomes urgent.

How much does help with does my uk company create a permanent establishment in my home country cost?

The fee depends on transaction volume, record quality, VAT and payroll requirements, historic catch-up and the level of reporting needed. We agree a fixed scope and price before technical work starts, with published packages available on our fees page.

Can you take over does my uk company create a permanent establishment in my home country from another accountant?

Yes. We request professional clearance, collect the prior records and authorities, check the next Companies House and HMRC deadlines, and give you one clear handover list. The process is normally completed remotely.

Can does my uk company create a permanent establishment in my home country be handled online?

Yes. We work through secure cloud records, scheduled reviews and digital approvals, while keeping a named team available by phone, video call and email. Clients can also visit our Morden office by appointment.

Which accounting software works best for does my uk company create a permanent establishment in my home country?

We regularly work with Xero, QuickBooks, FreeAgent, Sage and connected sales or expense apps. The right setup depends on transaction volume, integrations and the reports you need, not simply the software brand.

What tax deadlines matter for does my uk company create a permanent establishment in my home country?

The relevant calendar may include annual accounts, Corporation Tax payment and return dates, confirmation statements, VAT returns, payroll submissions and Self Assessment. We map the dates from your company year end and registrations.

Can I get free basic tax advice about does my uk company create a permanent establishment in my home country?

Yes. You can ask a straightforward initial question without charge. Calculations, filings, written advice, planning and HMRC correspondence are scoped and quoted before work begins.

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