Understand UK tax and incentives
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 give you information on how the tax environment works in the UK. This includes any available incentives and how we compare internationally. Please contact us to find out more.
Many companies in the UK also offer more bespoke tax advice. The UK government is working in partnership with the following companies:
- KPMG provides tax, audit and advisory services to those wanting to set up in the UK. 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 (compared to the usual 19%) on profits from inventions patented in the UK.
Global leaders in fairness and stability
The UK’s culture of entrepreneurship is supported by this trusted legal framework. UK courts follow legal precedents, but have the flexibility to adapt past rulings to meet modern business needs.
World class legal advisors are located all over the country – so no matter where you establish a business, you can be confident you will receive the best legal advice.
UK legal services
There are many companies that can help you understand the UK’s legal system. The UK government is working in partnership with KPMG, which has a range of integrated legal services that can help you. Read about KPMG’s legal services.
Intellectual property in the UK
The UK has very strict intellectual property laws. These protect the names, ideas, products, designs and written word of businesses.
You have automatic protection for:
- copyright (writing and literary works, art, photography, films, TV, music, web content, sound recordings)
- design right (shapes and objects)
Data protection in the UK
The UK’s privacy and data protection laws ensure that customer data is processed, held and disposed of fairly, legally, accurately and securely. Your business must abide by the UK’s Data Protection Act.
Stronger legal protections are in place for sensitive information such as ethnic background, political or religious belief, health records and criminal records.
Read the Data Protection Act for details on how this may be relevant for your business.