If you’re an international entrepreneur considering relocating your business to the UK, you’re in luck.
Alongside its strategic location between mainland Europe and the United States, the UK offers a range of tax incentives designed to encourage business growth and investment.
Here are some of the key tax benefits that make the UK an attractive destination for international business owners.
Corporation Tax rates
The UK offers variable rates of Corporation Tax depending on your company’s turnover:
- Small profits rate: A 19 per cent rate is available for companies with profits of less than £50,000:
- Main rate: Companies with profits in excess of £250,000 pay 25 per cent Corporation Tax.
- Marginal relief: Companies with profits between £50,000 and £250,000 will pay tax at the main rate, reduced by a marginal relief to provide a gradual increase in the effective Corporation Tax rate.
These rates are lower than the global average and apply to both resident and non-resident companies, making it an appealing option for international entrepreneurs.
R&D tax credits
The UK Government rewards business innovation by offering research and development (R&D) tax credits to companies that invest in qualifying R&D projects.
Depending on the project and your business, these credits can be used to reduce your Corporation Tax liability or receive a cash payment directly from the Government.
This provides you with more capital to invest in growth and further R&D work.
Additionally, by successfully claiming R&D tax credits, you’ll improve your company’s appeal to investors, who will be interested to cash in on your innovation success.
VAT regime
The Value Added Tax (VAT) system in the UK is favourable to businesses.
While most goods and services are taxed at the standard rate of 20 per cent, a reduced rate of five per cent applies to goods and services such as children’s car seats and home energy.
There is also a zero rate for certain items, including most foodstuffs and children’s clothes.
Additionally, businesses with a turnover below the VAT threshold of £90,000 are not required to register for VAT, although some may wish to do so in order to reclaim costs.
Your business may be eligible for the Flat Rate Scheme or the Cash Accounting Scheme, which can boost your cash flow and make VAT accounting much simpler.
UK expansion made easy with Reanda
Preparing your business to move to the UK will be much simpler with the help of an experienced international specialist on board.
At Reanda UK, our cross-border accounting experts are here to help you prepare for international expansion and reduce your tax liabilities both at home and abroad.
Thinking about moving your business to the UK? Contact our international experts today.
Reanda UK is a subsidiary of leading independent accountancy firm Grunberg. Our aim is to help businesses and individuals to navigate the UK’s world-renowned business and tax infrastructure, and to support them with their international ambitions. To find out how we can help you, please get in touch.