Tax for individuals

Applied to individuals who respond to criteria of tax resident one of which is to be in the country at least 183 days. If an individual is domiciled in the UK, the individual has to impose taxes on worldwide income. Double taxation can be avoided if the corresponding Double Taxation Agreement between jurisdictions is concluded.

If an individual is a British resident and has no domicile status, the individual receives a privilege to elude paying tax on foreign income providing that the income is not brought to the UK (remittance). Non-residents pay income tax if it was received in the UK jurisdiction.

Income tax

Imposed upon salaries, bonuses, pensions, and savings accounts interest. The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on. Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person's Allowance. It's smaller if your income is over £100,000.

Taxable income                  Tax rate

Up to £12,570                      0%

£12,571 to £50,270           20%

£50,271 to £150,000       40%

Over £150,000                   45%

Other allowances

Tax-free allowances are applied to

• first £1,000 of income from self-employment;

• first £1,000 of income from property you rent (unless you’re using the Rent a Room Scheme);

• first £2,000 of dividends from investments is also tax-free.

You can claim tax relief for spousal or child maintenance payments if the following applies:

• you or your partner were born before 6 April 1935;

• you're paying maintenance under a court order after the relationship ended;

• the payments are for the maintenance of your ex-spouse or former civil partner (provided they aren't now remarried or in a new civil partnership) or for your children who are under 21.

Corporate tax

Corporate tax is 19% till April 1, 2023. It keeps the same for the companies with an annual profit of less than £50 000. Companies that earn more than £50 000 will pay 25% tax. Corporate tax is imposed upon the operating profit and asset sales for the limited liability companies or any other foreign companies with headquarters or branches in the UK.

Capital gains tax

Tax is paid when an asset is disposed - sold, given away as a gift, swapped or compensation for it was received. CGT is charged at the rate of either 10% or 18% for basic rate taxpayers and 20% or 28% for higher or additional rate taxpayers.

Withholding tax

Withholding tax of 20% applies to dividends, royalties, yearly interest, certain qualifying annual payments, and rents paid by a UK company to any shareholder.

VAT

Corporations are obligated to register as VAT payers providing their turnover exceeds £85 000 annually. For reputation purposes or a tax refund on purchases, it is also allowed to do it voluntarily. The standard VAT rate is 20%. For special categories, 5% and 0% are applied.

Tax year

From 1 April to 31 March.

Income tax reliefs

Tax relief applies to pension contributions, charity donations, maintenance payments, and time spent working on a ship outside the UK.

It also applies to work or business expenses – you may be able to:

• get tax relief on what you spend running your business if you’re self-employed (a sole trader or partner in a partnership);

• claim tax relief if you’re employed and you use your own money for travel and things that you must buy for your job.