United Kingdom

The United Kingdom’s main corporation tax rate is 25% for companies with profits above GBP 250,000. A small profits rate of 19% generally applies to companies with profits up to GBP 50,000, and marginal relief may apply between GBP 50,000 and GBP 250,000. Resident companies are generally taxed on worldwide profits, subject to relevant exemptions and treaty rules.

United Kingdom VAT Overview:

1. The standard tax rate of 20% applies to most goods and services. Domestic fuel, electricity, and certain tax-reduced goods are subject to 5% VAT. Some small traders (with a supply of less than £150,000 per year) may apply a flat rate for a specific industry to calculate VAT.
2. Most exports, food, public transport, books and publications (including electronic publications since May 1, 2020) and certain essential goods and services are subject to zero tax rates. Some land, insurance, financial services, gaming and betting, education, certain sports services, cultural services, health and welfare are exempt.
3. VAT is deductible for costs incurred for zero-rated supplies, but not for costs incurred for tax-exempt supplies.
4. VAT applicable rules and regional rules are different from direct taxes. If goods or services are provided in the United Kingdom and a person or business outside the United Kingdom does not have a place of business in the United Kingdom, they may be required to register for VAT in the United Kingdom.
5. In the case of goods, the basic principle is that the supply of goods should be taxed at the physical place at the time of supply. In the case of services, the basic guideline is to pay VAT in the jurisdiction of the customer. For B2C supplies, the basic principle is that VAT is paid in the jurisdiction of the consumer's legal jurisdiction.

1. The VAT return must be completed on a scheduled time, usually every 3 months. Larger businesses may be required to file monthly statements or make monthly payments. Small businesses can apply for an annual return. In general, VAT returns must be filed within one calendar month and 7 days after the end of the VAT period.
2. Some small e-merchants (supply less than £150,000 per annum) may use a specific industry flat rate to calculate VAT. Since 1 April 2022, Making Tax Digital has required all VAT-registered businesses, unless exempt, to keep digital records.
3. Taxable taxpayers with an annual turnover (excluding VAT) of £1,350,000 or less can carry out annual accounting. Cash accounting is available to taxpayers with an annual turnover (excluding VAT) of £1,350,000 or less. In addition, a flat rate scheme has been introduced for small businesses, with the aim of simplifying the accounting process for VAT.

The United Kingdom does not levy a separate payroll tax apart from employer National Insurance contributions and normal payroll withholding obligations. Employers are responsible for operating PAYE, withholding income tax and employee contributions, and paying employer National Insurance contributions under the applicable rules.

Northern Ireland follows EU VAT rules for goods:
Under the Windsor Framework, EU VAT rules continue to apply in Northern Ireland to goods, but not to services. A VAT-registered business trading goods between Northern Ireland and the EU must be identified as operating under the Windsor Framework and add an "XI" prefix before its UK VAT number, so that VAT on those transactions is accounted for under the rules on intra-EU movements.

Low-value goods sold directly to consumers in Great Britain:
From 1 January 2021, businesses selling goods located outside the UK in consignments of £135 or less directly to consumers in Great Britain (not through an online marketplace) must register for UK VAT and charge VAT at the point of sale.

• Stamp duty is charged at 0.5% on instruments effecting sales of shares. 

• No UK company has been allowed to issue bearer shares (share warrants) since 26 May 2015 (Companies Act 2006, s.779(4)).
• Acquisitions of non-residential or mixed land and buildings in England and Northern Ireland are charged stamp duty land tax (SDLT) at progressive rates of up to 5%.
• Acquisitions of residential property by companies and similar non-natural persons and by individuals acquiring second homes are charged at rates of up to 17%; since 31 October 2024, companies pay a flat 17% on a residential property costing more than £500,000 unless a relief applies, and non-UK resident buyers pay a further 2%.
• Purchases of land and buildings in Scotland are subject to Land and Buildings Transactions Tax (LBTT). Residential rates are graduated up to 12%.