VAT Esteblishment - Physical Presence Meaning

Hello, We are setting up a company in the UK that will rent a shared property (with office, storage, and meeting facilities) and outsource staff through an employment bureau. The director will manage all business operations remotely, with outsourced staff handling UK-based tasks under the director’s direct supervision. Facts: 1. The director is not a UK resident. 2. The Company is not planning to employ a staff under PAYE. Instead, the company will outsource operations but the operations will be managed by the director. 3. The company will rent a shared property for the outsourced operational services to be carried out or, in other words, for the outsourced staff to work. I believe these arrangements would satisfy the requirement in HMRC 700/1 VAT Notice. "9.2 UK establishment — definition A UK establishment exists if either the: place where essential management decisions are made and the business’s central administration is carried out is in the UK business has a permanent physical presence with the human and technical resources to make or receive taxable supplies in the UK" Could you clarify if these arrangements might classify the company as a UK-established business for VAT purposes, or if it would be considered a Non-Established Taxable Person (NETP)? Thank you

Hi,
We would not be able to state definititely whether your business is a UK established business or a non established business. It would be a case of consulting the guidance and judging which category your business falls under.
As you stated the criteria for a UK business is as below:
A UK establishment exists if either the:
Place where essential management decisions are made and the business’s central administration is carried out is in the UK.
Business has a permanent physical presence with the human and technical resources to make or receive taxable supplies in the UK.

We would normally consider a company which is incorporated in the UK to have an establishment in the UK as long as is it also able to make or receive business supplies at its registered business address.
A registered, serviced or virtual office alone is not enough to create a business establishment.
Thank you.