Tax Guide to the United Kingdom
Entering the UK market and registering a company in England is a significant step, and ambition alone is certainly not enough. You need to have a clear understanding of the rules of the game. The UK is rightly considered one of the most prestigious and transparent jurisdictions in the world, but to avoid incurring fines, it is worth getting to grips with the finer points of the legislation right from the start. We will therefore now go through the key taxes and opportunities that the UK offers to international businesses.
Why do entrepreneurs choose England in particular?
For any business owner, tax is the number one priority. The United Kingdom offers what is arguably one of the most transparent systems in Europe. Setting up a company in England not only confers status but also provides access to legal tools that help capital grow more quickly. British law has been built on the protection of private property for centuries. This is precisely why companies in the UK inspire such confidence among investors and major banks around the world.
What taxes do businesses have to pay in the UK?
If you have decided to register a company in England, be prepared to deal with the main taxes:
- Corporation Tax. The standard rate is 25%. But there is some excellent news for small businesses. If your profits do not exceed £50,000, the rate drops to 19%. For a start-up in its early stages, this makes setting up a company in England a very cost-effective option.
- VAT. Registration becomes mandatory when your domestic turnover exceeds £90,000. If, however, you operate on an export basis (selling goods or services outside the UK), you may qualify for a 0% rate. This is a powerful advantage when competing in the global market.
- Dividends. A major advantage of the UK system is that there is no withholding tax on dividend payments to non-residents. For holding companies, this is often a decisive factor.
Accounting and auditing in England
It is important to note that companies in England remain obliged to file accounts even if they are not actually conducting any business activities (the so-called ‘dormant company’ status). Her Majesty’s Revenue and Customs (HMRC) imposes strict penalties and substantial fines for failure to meet the prescribed deadlines. In this regard, engaging a qualified accountant on an outsourcing basis is not an additional expense, but a necessary tool for ensuring compliance and minimising legal risks for your business.
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Is it possible to register a company in England on your own?
In their quest to save money, businesspeople often try to set up a company in England on their own, overlooking the stringent banking compliance requirements they will need to meet. At Intelligent Solution Group, we don’t just help you obtain the necessary documents from the registry; we build a viable business model:
- we calculate and determine an appropriate tax burden;
- we handle all accounting in accordance with UK GAAP;
- we liaise directly with tax inspectors should any issues arise.
Our experts’ comprehensive support allows you to focus entirely on scaling your business, whilst we take full responsibility for ensuring the legal compliance and financial stability of your UK entity.
Is it essential to hire an in-house accountant?
No, the law does not require this. However, to avoid getting confused by HMRC’s requirements, it is best to entrust your accounts to the professionals at Intelligent Solution Group.
