The taxation of UK companies (corporation tax) is charged at the rate of only 19%.
At Summer Budget 2015, the government announced legislation setting the Corporation Tax main rate (for all profits except ring fence profits) at 19% for the years starting the 1 April 2017, 2018 and 2019 and at 18% for the year starting 1 April 2020. At Budget 2016, the government announced a further reduction to the Corporation Tax main rate (for all profits except ring fence profits) for the year starting 1 April 2020, setting the rate at 17%.
In addition, the United Kingdom has one of the largest double taxation treaty network in the world and is, accordingly, ideally placed to enable internationally based companies and businesses to develop trading structures which can, to a significant extent, reduce the burden of withholding taxes charged against royalties, interest payments, dividends and the like.
There is no withholding tax payable when UK companies pay dividends to non-UK shareholders. The UK International Headquarters Company, subject to conditions, permits UK companies which are owned to a minimum of 80% by non-UK tax residents and who have subsidiaries incorporated either within the European Union or in countries with whom the UK is a signatory to an appropriate double taxation treaty, to receive dividends from those subsidiaries and pay those dividends to its shareholders free of any liability to UK tax.
The OCRA London team specialises in corporate planning and UK tax consultancy, we provide cost effective and robust business solutions for companies and entrepreneurs wishing to establish a presence in the United Kingdom.