Taxation in the UK

1. What is the corporate tax in UK?

The standard corporate tax rate for companies registered in the United Kingdom is 25%. Oil and gas extraction profits are taxed under a separate ring-fence corporation tax regime (30% plus a 10% supplementary charge). There is also a different rate for companies with profits up to 50,000 GBP per year (marginal relief up to 250,000 GBP). These have to pay a 19% corporate tax.
2. What is the VAT in UK?

The standard VAT rate in UK is 20%, with a reduced rate of 5% for things like children’s car seats or domestic heating fuel. There are also zero-rated goods and services, as well as exempts. The registration for VAT is mandatory for entities with taxable supplies above 90,000 GBP. If the taxable supplies decrease below 88,000 GBP, the deregistration is possible.
3. How can the VAT be refunded in UK?

As an EU business you can claim for refunds of VAT in UK by completing an online form and submitting it to HM Revenue and Customs (form VAT65A) by latest 31 December following the end of the claim year (1 July-30 June). The period covered by the claim must be at least three months and at most one year. The non-EU members
must submit an application regarding the refund, accompanied by the original invoices, a proof of payment of the VAT, a certificate of registration of the company in the foreign country. The above documents must be submitted to the HM Revenue and Customs. 
The decision regarding the refund is taken no later than four months and if its granted, the amount is transferred in the account of the claimant no later than 10 days.
4. What is the dividend tax in UK?

Dividends are usually exempt from taxes in UK, unless they are property income distributions paid by REITs, which bear 20% withholding tax.

5. What are the taxes rates applied on other payments?

The interest and royalties paid to nonresidents are usually taxed with 20%, unless are minimized or abolished by a treaty signed by UK with the recipient's country of residence.

6. Are there any incentives for foreign investors in UK?

Britain is a very attractive point of investments for foreign residents, but there are no tax incentives particularly designed for investors that come from abroad. However, they can be a subject to tax deductions in the UK system if they meet the specified requirements.  For instance, the United Kingdom is willing to encourage the investment in small companies, therefore some incentives are offered to the investors, no matter the residency.

7. Why do I need a local accountant for my business in UK?

It is strongly recommended that you have a British accountant, since proper accounting practices will bring only good to the company. Moreover, there is also the Companies Act 2006 and UK accounting standards (FRS 102 / FRS 105) that have to be met in order to have no worries.

Please contact us for company formation in the UK.