Just received a call from a director of my UK client whose head office in US. They have a company in the UK
Their rather eccentric US owner has decided the following
1) All book-keeping, payroll and tax work to be done in US
2) They are going to shut the UK bank account down and all transactions will be made from the US bank Sterling Account. The UK Customer will pay into the US bank account. The UK director was concerned that are there any regulations or possible breaches that he should be made aware of/
3) Invoices will be made from the US Company
I don't believe there is an issue with point 1 or 2 since they may appoint a global agent. However with point 3, the process at the moment is the UK company invoices the UK client for IT services rendered. The Work is undertaken in the UK on the company premises. The supervision and management of the project is undertaken in the UK. I have issues over VAT and Corporate Tax as the US entity is just acting as billing hub and VAT should be charged.
If the US office changes the entity on the contract to US and the contract is signed by a US owner. The Resources are sent to work on UK customer premises by the US offices. I suspect there will be no PE and no corporate tax payable ?