Corporate Tax in the U.K.
- Tax Base For Resident and Foreign Companies
The UK has a low-tax, low-allowance system of taxation and the government believes it is important to maintain a competitive tax system.
A UK-resident company is subject to corporation tax on its worldwide profits with credit given for most overseas taxes. A non-UK-resident company is subject to corporation tax only in respect of the profits of its PE in the UK and chargeable gains on assets used or held for the purpose of the trade or PE. If a non-resident company carries on an investment activity in respect of UK sources of income, it will be subject to income tax. A company is UK tax resident if it is incorporated in the UK or, if not incorporated in the UK, if its place of central management and control is in the UK.
|Small companies with taxable profits under GBP 300,000.||21%|
- Tax Rate For Foreign Companies
- Similar rates apply to UK permanent establishments (PEs) of non-UK-resident companies provided the company is resident in a territory that has an appropriate double-taxation treaty with the UK.
- Capital Gains Taxation
- Profits are taxed at 21% and 28% depending on the level of taxable profits.
- Main Allowable Deductions and Tax Credit
- Companies may deduct from gross trading profits all expenditure that is wholly and exclusively laid out for the purposes of the trade. Payments of indirect taxes are often deductible, as are most charitable contributions. Complicated provisions apply to deductions for certain employee share and share option schemes that, in general, do not follow the accounting treatment. For additional information.
- Other Corporate Taxes
- National Insurance Contributions (NIC), licenses for motor vehicles, municipal property tax (rates). For additional information.
Country Comparison For Corporate Taxation
|United Kingdom||OECD||United States||Germany|
|Number of Payments of Taxes per Year||8.0||14.2||11.0||16.0|
|Time Taken For Administrative Formalities (Hours)||110.0||199.3||187.0||215.0|
|Total Share of Taxes (% of Profit)||37.3||43.0||46.8||48.2|
Source: Doing Business
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
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