What are HMRC’s two tests for a UK establishment?
HMRC says a UK establishment exists if either of these is true:
- Management test. The place where essential management decisions are made and central administration is carried out is in the UK.
- Presence test. The business has a permanent physical presence in the UK with the human and technical resources to make or receive taxable supplies.
Meeting either test makes you UK-established. Meeting neither makes you a non-established taxable person (NETP).
Are you UK-established for VAT?
Essential management decisions and central administration happen in the UK.
A permanent UK presence with the people and equipment to make or receive supplies.
Not enough on its own
- Registered office
- Virtual or serviced office
- Mail-forwarding address
- UK fulfilment centre
- UK bank account
Does a virtual office count as a UK establishment?
No. HMRC states that a registered, serviced or virtual office alone is not enough to create a business establishment. The same applies to a mail-forwarding address or a UK fulfilment centre.
Is a UK limited company always UK-established?
Usually, but not always. HMRC normally treats a UK-incorporated company as established, as long as it can make or receive business supplies at its registered address. A UK company that is run entirely from abroad, with only a “brass plate” registered office, may still be a NETP.
Why does it matter?
| UK-established | Not established (NETP) | |
|---|---|---|
| VAT threshold | £90,000 in any rolling 12 months | None: register from the first UK taxable sale |
| Registration address | Your UK business address | Your principal place of business outside the UK |
| Tax representative | Not relevant | HMRC can direct some NETPs to appoint one |
| Deregistration | At £88,000 or less | Only if you stop making UK taxable supplies |
| VAT group | Can join one | Cannot join one |
Common scenarios
“We have a UK Ltd, but all our directors and staff are in India.”
If management and administration happen in India and the UK company has no staff or equipment in the UK, it may not be UK-established, even though it is UK-incorporated. Tell us how the company actually operates before choosing how to register.
“Our stock is in a third-party UK warehouse.”
Stock held by a logistics provider doesn’t usually create an establishment, because the people and equipment are the provider’s, not yours. You are likely a NETP selling UK-located goods, so there is no threshold.
“We’ve hired two salespeople in London with a desk in a co-working space.”
A permanent UK team with the resources to make or receive supplies can meet the presence test. You would then be UK-established, and the £90,000 threshold would apply from that point.
“Our CEO visits the UK every month.”
Regular visits don’t create an establishment on their own. What matters is where decisions are routinely made and administration is carried out.
Should I set up a UK company instead?
It depends on what you’re building in the UK. A properly run UK subsidiary is normally UK-established and uses the £90,000 threshold. It also brings company filings, UK accounts and Corporation Tax. Our sister site UK Establishment covers setting up and running a UK company from abroad.
Not sure whether you’re UK-established?
We look at how your business actually runs and tell you, in writing, which rules apply and what to register.
Frequently asked questions
What is a non-established taxable person?
Any person who does not have a UK establishment and makes taxable supplies in the UK. They must register for UK VAT from the first taxable supply. See NETP registration.
Does a UK registered office make my company UK-established?
Not on its own. HMRC says a registered, serviced or virtual office alone is not enough. The company must also be able to make or receive business supplies there, or be managed from the UK.
Can a UK branch count as an establishment?
Yes, if it is a permanent presence with people and equipment able to make or receive supplies. A branch that exists only on paper would not meet the test.
Does having a UK bank account create an establishment?
No. A bank account is not a physical presence with staff and equipment, and it says nothing about where the business is managed.
Related guides
Sources
- HMRC VAT Notice 700/1, section 9.2, UK establishment definition
- HMRC VAT Notice 700/1, section 9.4, principal place of business
General information based on HMRC guidance as at 27 September 2026, not advice for your situation. Rules change and depend on your facts. Talk to us before acting.