Many foreign e-commerce traders will have little incentive to establish themselves in the United Kingdom, or for that matter within low tax jurisdictions when they can trade without any tax risk from offshore centres such as the Cayman Islands and pay no tax. The United Kingdom can only impose a corporation tax charge where a trade is carried on through a branch or agency in the United Kingdom,7 or alternatively an income tax charge where a trade is carried on in the United Kingdom.8 The nature of e-commerce means that there is no reason why an offshore trader should be within a United Kingdom direct tax charge. There are also two practical problems for the Inland Revenue arising from e-commerce and direct taxes. First, how will it be possible to identify when a non-resident is exercising a trade in the United Kingdom? Secondly, how will it be possible to enforce a tax charge on a non-resident with no physical presence in the United Kingdom?9 Precisely how to solve the many problems arising from interaction of tax with e-commerce trade is far from clear. This tax vacuum for offshore traders is likely to continue for the foreseeeable future. The European Union has taken the stance that no new taxes should be applied on e-commerce, and of the existing tax concepts no one is precisely sure how these can be adapted to meet the danger that offshore centres pose to national tax revenues.