Taxes and Accounting in the U.K.

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Accounting Rules

Tax Year
The fiscal year begins on April 5th and ends on April 4th of the next year.
Accounting Standards
Finance Acts in 2004, 2005 and 2006 and regulations made under powers given by those Acts have included measures to ensure that companies choosing to adopt International Accounting Standards (IAS) or certain UK standards that are equivalent to IAS to draw up their accounts receive broadly equivalent tax treatment to companies that continue to use “mainstream” UK GAAP (UK Generally Accepted Accounting Practice).
Accounting Regulation Bodies
Financial reporting
International Accounting Standards Board
Accounting Reports
English companies must keep account books where are registered all the operations of the company and establish annual accounts including an annual report, a profit and loss account, a balance sheet, a table of financial flows, an appendix, an opinion of the auditors, a statement upon losses and earnings recorded, the comparison between the movements of interests of the shareholders and a note upon the result on historical costs basis.
Publication Requirements
Financial statement must be prepared annually.
Professional Accountancy Bodies
The Institute of Chartered Accountants in England and Wales
The Association of Chartered Certified Accountants
The Chartered Institute of Public Finance and Accountancy
Certification and Auditing
Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. For more information, consult the Audit Commission and National Audit Office (NAO).
Accounting News
Accounting Web
Accountancy magazine

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Tax Rates

Consumption Taxes

Nature of the Tax
Value Added Tax (VAT)
Tax Rate
Reduced Tax Rate
United Kingdoms apply a reduced VAT rate of 5% on certain categories of goods and services, including children’s car seats or social housing. Water supplies, pharmaceutical products, medical equipment for disabled persons, books, newspapers, social services… are exempted of VAT.
Other Consumption Taxes
All informations are available on the website HM revenue and customs.
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Corporate Taxes

Company Tax
Tax Rate For 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.

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.

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Individual Taxes

Tax Rate

Income tax rate for 2010-2011 Progressive rate from 10% to 40%
GBP 0 - 2,440 10%
GBP 2,441 - 37,400 20%
Above GBP 37,400 40%
Allowable Deductions and Tax Credit
Personal allowances.
Expenses incurred in the performance of professional duties.
Some share-incentive, pension and savings schemes may confer tax advantages.
Special Expatriate Tax Regime
Consult HM Revenue & Customs to know the most recent rules.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of tax treaties signed by the United Kingdoms
Withholding Taxes
Dividends: 0%, Interest: 20% for nonresidents, Royalties: 20% (rates can be lower if a tax treaty is signed)

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Sources of Fiscal Information

Tax Authorities
HM Revenue & Customs
Other Domestic Resources
UK Trade & Investment
Fiscal information on the UK

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Find more on about Taxes and Accounting in the United Kingdom.

Intellectual Property

National Organizations
The UK Intellectual Property Office, The Department for Innovation, Universities and Skills (DIUS).The United Kingdom is part of the Agreement of Paris for the protection of industrial property and of the Agreement establishing the World Intellectual property Organization (WIPO). The United Kingdom signed the Patent Co-operation Treaty and the Agreement of Nice.
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property

National Regulation and International Agreements

Type of property and law Validity International Agreements Signed
Patent Act
20 years
Patent Cooperation Treaty (PCT)
Strasbourg agreement Concerning the International Patent Classification
Trademarks Act
10 years Trademark law treaty
Nice agreement
Protocol relating to the Madrid Agreement
Design Act
5 years  
Copyrights, Designs and Patents Act 1988
70 years except for typographical arrangements, where it is 25 years. Berne convention
Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations
WIPO Copyright Treaty
WIPO Performances and Phonograms Treaty
Industrial Models

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Legal Framework

Independence of Justice
Judiciary is completely independent in U.K.
Equal Treatment of Nationals and Foreigners
Britain has large numbers of immigrants and locally born children of immigrants, who receive equal treatment under the law. In practice, their living standards are lower than the national average, and they complain of having come under increased suspicion since the July 2005 terrorist attacks in London and the alleged foiled plot in August 2006.
The Language of Justice
Recourse to an Interpreter
In case of penal action, an interpreter should be made available for individuals who do not speak or understand English sufficiently. Interpreters should be registered with the NRPSI (National Register of Public Service Interpreters).
Sources of the Law and Legal Similarities
United Kingdom is a constitutional monarchy based on parliamentary democracy. In the absence of a written constitution, the main source of the law in the country is the common law with early Roman and modern continental influences. Scotland has a separate legal system. UK accepts compulsory ICJ (International Court of Justice) jurisdiction but with reservations. Being a member of the EU, the national law in UK needs to comply with the conditions of the Community legislation.
Checking National Laws Online
British Law - Community information site for citizens and small businesses
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National Standards Organizations
British Standards Institution
Integration in the International Standards Network
The UK is a member body of the International Organization for Standardization and a full member of the International Electrotechnical Commission. It is also a member state of the International Telecommunication Union.
There are also some specific EU standards: European Committee for Electrotechnical Standardization ( CENELEC), European Telcommunications Standards Institute ( ETSI), European Committee for Standardization ( ECS), handling all other standards.
Classification of Standards
There are over 27,000 British Standards in use and 2000 are produced annually. CE is the European certification mark. It is compulsory for a country to be able to sell on the market.
Online Consultation of Standards
The BSI Shop offers a full catalogue of standards and publications, many of which are available as PDF downloads.
Certification Organizations
The United Kingdom Accreditation Service. Follow this link for a list of Certification Body Schedules.

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Business Practices

General Information
Kwintessential Cross-cultural Solutions
Executive Planet
Opening Hours and Days
Banks open from Monday to Friday, from 9.30 to 15.30. In the City district of London, banks close at 15.00 and some are open on Saturday morning but schedules and services are very variable. Most shops have long opening hours and some supermarkets are even open 24 hours a day until 4pm on a Sunday.

Public Holidays

New Year Day January 1st
2nd January 2nd January (Scotland only)
Saint Patrick's Day March 17 (in Northern Ireland only)
Good Friday Friday before Easter
Easter Monday Monday after Easter Sunday (except in Scotland)
May Day first Monday of May
Spring Bank Holiday Last Monday of May (except in Northern Ireland, where it is the first Monday of May)
Orangemen's Day 12th July (Northern Ireland only)
Summer Bank Holiday last Monday of August (except in Scotland, where it is on the first Monday of August)
St Andrew's Day November 30 (from 2008, in Scotland only)
Christmas Day December 25
Boxing Day December 26

Periods When Companies Usually Close

There are no set times when companies close, but many close. Between Christmas and New Year

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