Company formation in United Kingdom

Taxes in the United Kingdom

Corporate income tax (CIT)

CIT rates:

• small profits rate - 19% for companies with taxable profits below £50,000 (~ €59,000);
• main rate: 25% for companies with taxable profits above £250,000 (~ €292,000);
• marginal relief - applies to companies with profits between £50,000 (~ €59,000) and £250,000 (~ €292,000), providing a smoother transition to the main rate.

Personal income tax (PIT)

Personal Allowance: the first £12,570 (~ €15,000) of income is tax-free.

PIT rates:

• 20% is the basic rate on income between £12,571 (~ €15,000) and £50,270 (~ €59,000);
• 40% is the higher rate on income between £50,271 (~ €59,000) and £125,140 (~ €146,000);
• 45% additional rate on income above £125,140 (~ €146,000).

Value-added tax (VAT)

The standard VAT rate is 20% on most goods and services.

Reduced VAT rates:

• 5% on some essentials like home energy and children's car seats;
• 0% on items like most food and children's clothes.

Double taxation avoidance agreements in the United Kingdom: Albania, Algeria, Anguilla, Antigua and Barbuda, Argentina, Armenia, Aruba, Australia, Austria, Azerbaijan, Bahamas, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Belize, Bermuda, Bolivia, Bosnia-Herzegovina, Botswana, Brazil, British Virgin Islands, Brunei, Bulgaria, Cameroon, Canada, Cayman Islands, Chile, China, Colombia, Croatia, Cyprus, Czech Republic, Denmark, Dominica, Egypt, Estonia, Ethiopia, Falkland Islands, Faroes, Fiji, Finland, France, Gambia, Georgia, Germany, Ghana, Gibraltar, Greece, Grenada, Guernsey, Guyana, Hong Kong, Hungary, Iceland, India, Indonesia, Iran, Ireland, Isle of Man, Israel, Italy, Ivory Coast, Jamaica, Japan, Jersey, Jordan, Kazakhstan, Kenya, Kiribati, Kosovo, Kuwait, Kyrgyzstan, Latvia, Lebanon, Lesotho, Liberia, Libya, Liechtenstein, Lithuania, Luxembourg, Macao, Macedonia, Malawi, Malaysia, Malta, Marshall Islands, Mauritius, Mexico, Moldova, Monaco, Mongolia, Montenegro, Montserrat, Morocco, Myanmar (Burma), Namibia, Netherlands, Netherlands Antilles (Curacao, Sint Maarten, and BES Islands), New Zealand, Nigeria, Norway, Oman, Pakistan, Panama, Papua New Guinea, Peru, Philippines, Poland, Portugal, Qatar, Romania, Russia, Saint Christopher (Saint Kitts) and Nevis, Saint Vincent and the Grenadines, San Marino, Saudi Arabia, Senegal, Serbia, Sierra Leone, Singapore, Slovak Republic, Slovenia, Solomon Islands, South Africa, South Korea, Spain, Sri Lanka, St Lucia, Sudan, Swaziland, Sweden, Switzerland, Taiwan, Tajikistan, Thailand, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Turks and Caicos Islands, Tuvalu, Uganda, Ukraine, United Arab Emirates, Uruguay, USA, Uzbekistan, Venezuela, Vietnam, Zaire, Zambia, Zimbabwe.