The UK has one of the most competitive tax systems in the world and the corporate tax rules are simple and clear.
Understand UK tax and incentives
Business taxes in the UK
Any company with a UK branch or office must pay UK Corporation Tax on company profits. The current Corporation Tax rate is 19%, reducing to 17% by 2020. At the current rate of 19%, the UK has the lowest headline business tax rate in the G20.
Tax on sales
Value Added Tax (VAT) must be charged and paid on goods and services. UK VAT is charged at 20%, although there are some exceptions. UK businesses that sell goods or services charge VAT on sales and customers who are themselves registered for VAT will be able to recover VAT paid out.
VAT is not applied to most export transactions, although it is likely to apply to sales to non-VAT registered businesses and private individuals within other EU countries.
Tax on imports
Imports into the UK (and other EU countries) from non-EU countries have import duty charged on goods but not services.
Services to help you understand UK business taxes
The UK government can provide information on how the tax environment works in the UK, the incentives which might be available to you if you set up here, and how we compare internationally. Please contact us to find out more. Many companies in the UK can offer tax advice. The UK government is working in partnership with the following companies;
- KPMG, whose strategy team provide tax, audit and advisory services to those wanting to set up in the UK audit. Read about KPMG’s services
- PwC, an international professional services network based in 157 countries across the world. See PwC’s advice on investing in the UK
- EY is an international business services company. Read about EY’s tax services
- Deloitte is a network of business services companies. Read about Deloitte’s tax services
Tax relief and incentives for businesses in the UK
The UK offers attractive venture capital schemes to help small and medium enterprises expand.
There are generous incentives for companies investing in research and development in the UK to promote fast-growing, innovative services and products. The Patent Box offers a 10% corporation tax on profits from inventions patented in the UK (compared to the usual 19% corporation tax).