Great Britain (England, Scotland, Northern Ireland)

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Great Britain (England, Scotland, Northern Ireland)

GENERAL INFORMATION ABOUT JURISDICTION

Great Britain (officially – the United Kingdom of Great Britain and Northern Ireland) – monarchy island state in the Western Europe, which had a powerful influence on the world in the past and continues to dictate its terms and rules nowadays. The monarch of the Great Britain «reigns but does not governs» and has no influence into political life of the country, but indeed, is a significant consolidated factor for the whole empire.

The legal system of the Great Britain varies from other jurisdictions by the absence of constitution and is based on precedent. Thereby some legislative acts guarantee significant privileges for business with the high level of prestige of English companies.

 

1. LAW

Company in England and its activity is governed by the Company Law in England (Companies Act 2006) and Limited Liability Partnership Law (Limited Liability Partnership Act 2000). 

2. ENGLISH COMPANY INCORPORATION

2.1. Types of companies

To register the company in England one should understand which types of companies is permitted by this country. Companies Act prescribes some corporate forms, the most popular of which are Limited Liability Company (Limited, Ltd). For the aim of tax planning Limited Liability Partnership (LLP) can be used as well.

2.2. Limited Liability Company (Ltd):

  • Minimum statutory capital – not established.
  • Shares – registered with indication of nominal value (min. £1).
  • Director – at least one individual, no residence requirement.  Shareholder and director can be one person at the same time.
  • Shareholders – at least one individual or legal entity, no residence requirement.
  • Secretary – not required.
  • Public information: information about directors and shareholders. Information about the beneficiary holder may be hidden with a help of nominal service.
  • The company is both obliged to form and submit annual financial report and  to be audited  (not required for small companies: annual turnover of which does not exceed $6,5 million, total balance sheet for the year does not exceed $3,26 million, quantity of employers is not more than 50).

2.3. Limited Liability Partnership (LLP):

  • Minimum statutory capital – not established.
  • Founders’ requirements – at least two partners, one of which shall be a legal entity. Individual can act as a partner as well. No residency or place of registration requirements.    
  • Director – in principal director is absent, at least two responsible partners from the whole amount of partners with directors responsibilities shall be designated.
  • Secretary – not required.
  • Public information: information about partners.
  • Company in England is obliged to form and submit annual financial report and shall be audited.
  • LLP in the Great Britain is not subject to corporate tax in case when partners of the LLP are not  residents of the UK and the LLP’s income was made outside UK. Income taxes shall be paid by partners within which such income were allocated.  Thus, partners – residents of jurisdictions with low tax rates may use this rule during the tax payment in their country of registration (residence) on distributed partnership income.

3. TAXATION

Taxation in England is based on territorial principle: resident companies are liable to taxation on their overall income, and non-resident companies are tax liable on their income gained in England.

Income tax is 20% (in 2017 the rate may be reduced to 19%).

Dividend Tax depends on the amount of the sum of the income. Further, you can find the tax rates on the dividend which are valid from April the 06th, 2014 till April the 05th, 2015. The low tax rate is 10%, high – 32,5%, additional tax rate – 37,5%.

VAT – 20% (in some cases may apply reduced rate – 5% or 0%).

Acquiring a LLP company appears to be beneficial in terms that such company is not income tax liable. The income gained by the English LLP company is considered as the personal income of the LLP’s partners. Therefore, the partners are liable for tax accounting in the country of their residence.  So, acquiring a LLP company and correctly organizing its corporate structure where the LLP’s partners are not the UK residents, but are residents of other jurisdictions makes a LLP company free from paying UK taxes. In order to save the income at largest, it is advised to use the offshore residents from nil tax jurisdictions as partners of LLP.

4. CURRENCY CONTROL

Not applicable.

5. DOUBLE TAX AVOIDANCE AGREEMENTS

England concluded double tax avoidance agreements with more than 140 countries, including Ukraine.

6. PARTICULARS    

It is obligatory condition to have a registered address in this country for registration of company in England.

Registration of Limited Liability Partnership in accordance with Limited Liability Partnership Act is permitted only on the territory of England, Wales and Scotland, considering nonproliferation of that Act for the Northern Ireland.  However, the Law of Northern Ireland on Limited Liability Partnership, 2002, does not contain substantial differences as compared to the similar Law of the Great Britain. In turn, the Companies Act 2006 has effect overall territory of the Great Britain.

Particular of company registration in the Northern Ireland

Most frequently, the company in Ireland is registered in form of private limited liability company (Ltd). There is no big difference in requirements between English and northern-Irish Ltd, but the official address in such case shall be registered on the territory of the Northern Ireland, company secretary is required (one individual or legal entity without residency requirement). 

Current corporate tax in the Northern Ireland is 12,5%.

The standard rate of Irish VAT is 23%. Some reduced VAT rates are also applicable, like: 13,5%, 9%, 4,8%, and 0%.

If you are willing to incorporate a company in the UK, please kindly refer to Campio Group office, where the experts will answer all your questions and will help you to incorporate a company in the UK.