Guide

Locate your business in the UK

Taxation in the UK

There are a number of different taxes that you may have to pay in the UK.

Personal taxation

You will normally have to pay UK tax on all of your worldwide income if you are a UK resident. You become a UK resident if you:

  • spend at least 183 days in the UK during any tax year - from 6 April to 5 April
  • are planning to stay in the UK for at least two years
  • come to the UK to visit for an average of more than 90 days per tax year over four years - residence is valid from the beginning of the fifth year

If you are resident but not permanently resident in the UK, you will only have to pay tax on any overseas income that you bring into the UK. However, income generated in the Irish Republic is taxable whether or not it is brought into the UK.

Read more about personal taxation rates.

Company taxation

You must pay corporation tax if your company is resident in the UK. Corporation tax is payable on worldwide profits after they have been adjusted for tax purposes.

VAT

VAT is a charge that you normally pass on to your customers. However, it is the supplier of the goods or services who is ultimately liable to pay the tax.

National Insurance

Most working people in the UK have to pay National Insurance contributions (NICs), which are collected by HM Revenue & Customs (HMRC). There are six types of NIC, some of which are paid at a flat rate and some which are linked to earnings.

PAYE (Pay As You Earn)

As an employer, you are responsible for deducting income tax and NICs from your employees' pay and submitting these payments to HMRC. The system for collecting income tax from pay, as employees and directors earn it, is known as PAYE.

For any issue relating to taxation, you should contact HMRC.