Can a branch issue invoices from the parent co?

Can a branch issue invoices from the parent co and reallocate the income later?

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Hi, I have an overseas client who is looking to open a branch in the UK.

One question they had was if they could issue their invoices from the overseas 'parent' company instead of the branch. 

They would later on apportion the income to the UK branch and pay tax in the UK on that income. So any P&L or BS produced would still accurately show the income from the branch activity.

The reason they want to do this is that they have licences that are in the main company name and they don't want to issue invoices from the branch as the branch itself wouldn't have the licence.  

I am aware that the branch is an extension of the overseas company but they seemed adamant the licence would not extend to the branch. It is a bit of a circle as they need a UK presence to get the licence in the UK (hence wanting to open the branch), but the licence would be issued to the overseas entity, not the branch. 

Thanks in advance!

Replies (2)

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By paul.benny
11th Nov 2021 16:24

In my (limited) experience ‘branch’ means slightly different things in different countries. Companies House only require registration of a branch for foreign companies with a physical presence. I don’t believe home-based employees or stock in a third party warehouse qualify as physical presence (although the latter is likely to trigger obligation to VAT register).

As you note, a branch is not a separate legal entity, so I see no issue in raising invoices from the parent. In any case, filing requirements are based on the parent entity and their local law – the branch does not need to filed at CH, but of course, if it is a permanent establishment, tax filing will be needed.

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Replying to paul.benny:
By harpsong
11th Nov 2021 16:34

Thank you, that was pretty much my exact thoughts. I was hoping to hear other people's opinions so that is slightly reassuring.

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