The UK is a great location for international entrepreneurs, despite its gloomy weather.
That’s right, it’s not just crumpets, tea and big red buses – the UK could be the next step in your journey as an entrepreneur.
If you’re an international entrepreneur considering relocating your business to the UK, you’ll be pleased to know that the country offers a range of tax incentives designed to encourage business growth and investment.
Below, we explore some of the key tax benefits that make the UK an attractive destination for business owners and outline why you might want to consider moving to ‘Old Blighty.’
Competitive Corporate Tax rates
One of the most compelling reasons to move your business to the UK is the competitive Corporate Tax rates.
Currently, the UK’s Corporation Tax varies between 19 and 25 per cent, depending on your business’s profitability, which is lower than the global average.
This rate applies to both resident and non-resident companies, making it an appealing option for international entrepreneurs.
A lower tax rate can significantly reduce your company’s tax liability, freeing up more capital for investment and growth and increasing your bottom line.
R&D tax credits
The UK Government strongly supports innovation and offers generous research and development (R&D) tax credits to companies that invest in qualifying R&D projects.
These credits can either reduce your Corporate Tax bill or, in some cases, result in a cash payment directly from the Government.
Reducing your tax liabilities is highly beneficial for your business accounts and finances.
Tax reductions for patented products
If your business involves patented products or technologies, you can benefit from the Patent Box regime.
This scheme allows companies to apply a lower rate of corporation tax (10 per cent) to profits earned from patented inventions.
The Patent Box is designed to encourage companies to develop and commercialise intellectual property in the UK.
EIS and SEIS reliefs
The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) are two initiatives aimed at encouraging investment in early-stage and high-risk companies.
These schemes offer significant tax relief to investors who purchase shares in qualifying companies.
For entrepreneurs, this makes it easier to attract investment, as the tax incentives reduce the financial risk for investors.
Capital allowances lowering initial start-up costs
Starting a new business involves various initial costs, from purchasing equipment to leasing office space.
The UK’s capital allowances system allows businesses to deduct the cost of certain assets from their taxable profits, effectively lowering their initial start-up costs.
This includes allowances for machinery, vehicles, and even some types of building expenditure.
Favourable VAT regime
The Value Added Tax (VAT) system in the UK is designed to be business friendly.
Businesses with a turnover below a certain threshold are not required to register for VAT, reducing administrative burdens for smaller enterprises.
Additionally, there are various VAT schemes, such as the Flat Rate Scheme and the Cash Accounting Scheme, which can simplify VAT accounting and improve cash flow.
All aboard for Great Britain!
Preparing your business to move to the UK has never been easier with the help of SMCO’s international tax experts.
An experienced accounting professional can help you in reducing your tax liabilities, both at home and abroad, and prepare you and your business for international expansion.
From competitive corporate tax rates to generous R&D credits and investor reliefs, the UK’s tax incentives are designed to support businesses at every stage of their growth journey, but in-depth knowledge of the regulatory environment is crucial.
If you’re considering making a move, consult with SMCO’s tax professionals to ensure you take full advantage of the benefits available to you.
Journey through the streets of London, with SMCO’s advisers as your guide, on a voyage to tax incentives and business opportunities within the United Kingdom. Get in touch to find out more.
