United Kingdom

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

The rate of the Corporation Tax is progressive from 10% to 30%. It is 10% for profits lower than 10,000 , of 20% for profits included between 50,001 and 300,000 and of 30% for profits superior to 1,500,000 . A marginal relief applies to the following brackets of profits: 10,000 - 50,000 and 300,001 - 1,500,000 ; The minimum tax rate of 10% should be reduced to 0% in 2003.

   
Tax rate on long-term capital gains In the United Kingdom, capital gains are taxed at the rate of 30%.
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies Dividends are subjected to a payment at the source with a maximum rate from 15% on their gross amount. It entitles to a tax credit under certain conditions (within the framework from the ACT, the agreement foresees that a French company which have at least 10% from the rights to vote from a distributor company, resident from the United Kingdom, can benefit from the British tax credit).
Group Relief:
Admittance to the regime: Option within the 2 years from the fence from the fiscal year in conformance with the demand which is sent.
Particular conditions: Agreement from the fiscal administration on the regime from exemption.
Taxes affected: corporate tax, VAT.
   
Tax rate on branches Branches are imposed on the corporate tax or the income tax, on land taxes and on VAT.




Income tax

Fiscal year The fiscal year begins on April 5th and ends on April 4th of the next year.
   
Income tax rate Tax rate schedule 2002:
1 to 1,880 : 10%
from 1,881 to 29,400 : 22%
Beyond 29,400 : 40%
There are no wealth tax.
   



VAT rates

Standard rates 17.5%
   
Reduced rates 0% and 5%



Other important taxes


Name of tax
Rate
Petroleum Tax  
50% of profits resulting from the origin of hydrocarbons (tax deductible from the corporate tax).  
Land taxes  
They are calculated on the basis of the rental value according to a fixed rate expressed in pound: 44,9 p for England, 40,5 p for Wales and Scotland. They are owed by the occupant.
Single rate voted by the national parliament.  
Stamp duties  
The transfers of actions: 0,5%
The transfers of grounds: 1%, 2% and 3% according to the selling price (exemption of deals which value does not exceed 60 000 ).  
Inheritance taxes  
40%  


 

Accounting


Obligations and publications
The audit report must indicate that accounts are in agreement with the accounting of the company and respect the accounting standards.
The 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.

Professionals and representative organizations
Only the "Chartered accountants" and "Certified accountants" are authorized and have the possibility given by the accounting commission to exercise a mission of audit or auditorship.



Useful links
For further information, please contact Inland Revenue.

Last modified in 2006 - ongoing update
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