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COUNTRY TRADING PROFILES
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Taxes - Accounting
Tax Rates |
Accounting Rules
Tax Rates
Consumption taxes
- Nature of the tax
-
Value Added Tax (VAT)
- Tax rate
- 20%
- Reduced tax rate
- United Kingdoms apply a reduced VAT rate of 5% on certain categories of goods and services, including children’s car seats or social housing. Water supplies, pharmaceutical products, medical equipment for disabled persons, books, newspapers, social services… are exempted of VAT.
- Other consumption taxes
- All informations are available on the website HM revenue and customs.
Corporate taxes
Tax rate
| Corporate tax |
26% |
| Small companies with taxable profits under GBP 300,000. |
20% |
- Tax rate for foreign companies
- The UK has a low-tax, low-allowance system of taxation and the government believes it is important to maintain a competitive tax system.
A UK-resident company is subject to corporation tax on its worldwide profits with credit given for most overseas taxes. A non-UK-resident company is subject to corporation tax only in respect of the profits of its PE in the UK and chargeable gains on assets used or held for the purpose of the trade or PE. If a non-resident company carries on an investment activity in respect of UK sources of income, it will be subject to income tax. A company is UK tax resident if it is incorporated in the UK or, if not incorporated in the UK, if its place of central management and control is in the UK.
- Capital gains taxation
- Profits are taxed at 21% and 28% depending on the level of taxable profits.
- Main allowable deductions and tax credit
- Companies may deduct from gross trading profits all expenditure that is wholly and exclusively laid out for the purposes of the trade. Payments of indirect taxes are often deductible, as are most charitable contributions. Complicated provisions apply to deductions for certain employee share and share option schemes that, in general, do not follow the accounting treatment. For additional information.
- Other corporate taxes
- National Insurance Contributions (NIC), licenses for motor vehicles, municipal property tax (rates). For additional information.
Individual taxes
Tax rate
| Income tax rate for 2010-2011 |
Progressive rate from 10% to 40% |
| GBP 0 - 2,440 |
10% |
| GBP 2,441 - 37,400 |
20% |
| Above GBP 37,400 |
40% |
- Allowable deductions and tax credit
- Personal allowances.
Expenses incurred in the performance of professional duties.
Some share-incentive, pension and savings schemes may confer tax advantages.
- Special expatriate tax regime
- Consult HM Revenue & Customs to know the most recent rules.
Double taxation treaties
- Countries with whom a double taxation treaty have been signed
- See the list of tax treaties signed by the United Kingdoms
- Withholding taxes
- Dividends: 0%, Interest: 20% for nonresidents, Royalties: 20% (rates can be lower if a tax treaty is signed)
- Bilateral agreement
-
 We can indicate you which local taxes are applied to your product.
Accounting Rules
- Tax year
- The fiscal year begins on April 5th and ends on April 4th of the next year.
- Accounting standards
- Finance Acts in 2004, 2005 and 2006 and regulations made under powers given by those Acts have included measures to ensure that companies choosing to adopt International Accounting Standards (IAS) or certain UK standards that are equivalent to IAS to draw up their accounts receive broadly equivalent tax treatment to companies that continue to use “mainstream” UK GAAP (UK Generally Accepted Accounting Practice).
- Accounting regulation bodies
-
Financial reporting
International Accounting Standards Board
- Accounting reports
- 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.
- Publication requirements
- Financial statement must be prepared annually.
- Professional accountancy bodies
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The Institute of Chartered Accountants in England and Wales
The Association of Chartered Certified Accountants
The Chartered Institute of Public Finance and Accountancy
- Certification and auditing
- Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. For more information, consult the Audit Commission and National Audit Office (NAO).
- Accounting news
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Accounting Web
Accountancy magazine
© Export Entreprises SA, all rights reserved.
Last updates: February 2012
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