UK tax and incentives

The UK has simple, clear laws helping make it the ninth easiest place to do business in the world, according to the World Bank.

Last updated 05 March 2020

A clear tax system

We have a single company tax that’s transparent and applied consistently. Any company resident in the UK must pay UK Corporation Tax on company profits. Any overseas company with a UK branch or office must pay UK Corporation Tax on company profits arising in the UK.

A competitive tax system

The current Corporation Tax rate is 19%, the lowest in the G20.

The UK does not have a withholding tax on dividends paid by UK companies to shareholders in another country.

A fair tax system

In the UK, the rule of law is respected. Our tax system is fair and tax is expected to be paid. We meet all international tax standards and work with the OECD to counter tax avoidance.

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Tax reliefs and incentives

The UK offers attractive venture capital schemes to help small and medium enterprises expand.

The Enterprise Investment Scheme and the Venture Capital Trusts offer tax relief for individuals interested in investing in UK small businesses.

There are generous incentives for companies investing in research and development in the UK to promote fast-growing, innovative services and products, such as the R&D Expenditure Tax Credit.

In addition, the Patent Box offers a 10% corporation tax (compared to the usual 19%) on profits from inventions patented in the UK.

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Tax advice for doing business in the UK

The UK government can give you information on how the tax environment works in the UK.

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During the transition period

The UK left the EU on 31 January 2020 and entered a transition period until the end of the year. Bilateral agreements with all EU member states to avoid double taxation will continue to apply as they do now.

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Research and development tax relief

Enterprise and Investment Scheme

Venture Capital Trust