UK tax treaties generally mean that business profits from a foreign enterprise are taxable in the UK only where the enterprise profits are attributable to a UK permanent establishment (PE).
The UK broadly follows the OECD model treaty definition of a PE, however the rules do differ in some areas – we can guide you when looking into this. The UK has also introduced new anti-fragmentation rules to prevent businesses artificially splitting up activities in order to avoid creating a PE.
Whether you have a UK construction site, a few workers in the UK with limited authority, or more substantial UK operations, it is critical to fully understand the activities as a whole and determine whether a UK PE has been created. Transfer pricing principles will then need to be applied to ensure an appropriate level of profit is attributed to the UK PE.