Formation Company & Tax Advisory

Monday, July 16, 2018

Tax Incentives in United Kingdom (UK)

One of the most peculiar features of the Britain economic background is the presence of incentives and tax breaks for business start-up projects and the foreign investors have right to benefit from them just like the domestic ones. To get such benefits it is necessary to know the land, law, customs situation, and proceed with a precise analysis of the bureaucratic and organization procedure you have to cope with.

From a fiscal point of view there are several incentives for both people who start an entrepreneurial activity and who make new investments in established company. Bright Business Consulting LLP supports its Customer all the way.

The range of incentives and benefits that businesses can benefit from investing in the United Kingdom is very broad and also aimed at promoting policy targets. They are issued as tax benefits, tax cuts, tax credits, grants and so forth.:

  • FAVORABLE TAX TREATMENT BOUND TO ECONOMIC EXPLOITATION OF INTELLECTUAL PROPERTY - IP: Given British Governent's estimated annual cost of about one billion GBP, the British Parliament has committed since April 1st, 2013 in a process of medium-term innovation to create jobs and prosperity. In the United Kingdom a reduced 10% tax rate has been applied (compared to former standard 24% one, the so-called - Patent Box Regime), applicable to income coming from economic exploitation of IPs, confirming the willingness of authorities to support not only researching and development but also enterprises' economic exploitation coming from thus research.
  • TAX CREDITS ON RESEARCH: Since April 1st, 2013, a new tax credit has been introduced in the UK for researching and developing its refundable 10%, as an alternative to the super deduction of 130% which is in force until April 1st, 2016, when tax credit will become the only available system. This tax credit will allow decreasing businesses in the UK to get, within certain limits, tax benefits for researching and developing which could not be otherwise be able to take advantage of by the super deduction system.
  • GRANTS AND PROGRESSIVE TAX CUT ON COMPANY INCOME: which are in addition to the above. The UK offers grants for building new production facilities for goods or services, for carrying out projects of research and development involving the creation of new jobs. The last ban, which expired in March 2013, provided for 350 million GBP.

Important subsidies are guaranteed to investors in machinery and installations, providing for a tax deduction of 250 thousand GBP. The countless possibilities given to the "Start-Up" are not to be underestimated, given that it can receive subsidized loans or grant for projects such as "All Stars" where rewards are given every year to the best dozen "Start-Ups" whose establishments are less than three years old, i.e. "Start-Up" in the UK. The award grants annually National Business Awards - the NBA.

The program called "Create UK" aims to double sectorial exports' size - from 15.5 billion GBP in 2012 to 31 billion GBP by 2020 - through supporting foreign trade, education, investments, infrastructures and intellectual property protection.

In order to achieve the best increase of its economy and the subsequent growth of GDP by 2030, the British Parliament has issued some measures in terms of "Tax Cuts in the UK - (UK)":

  • Add creative industries in the official list of the strategic businesses providing these important incentives and reliefs.
  • Focus on small and medium-sized enterprises giving incentives and reliefs in 2014.
  • Allocate 1 billion GBP to projects aimed at lightening up, by about a third, the tax burden on small businesses.
  • Allocate a lump-sum refund of around 2000 GBP in favor of Employment Allowance. In addition, small businesses (pubs, bars, shops and so forth) are going to get, due to their social role especially in small towns and suburbs, a further tax cut, thus ensuring these individuals "Tax Benefits in the United UK - (UK) ".

The global energy crisis has forced a radical change in Politicians in charge and energy companies in the UK. A higherawareness of the effects of climate change has led to an aggressive strategy of "decarbonization" led by the renewable energy sector.

The UK Government is demonstrating a strong commitment to it with its tangible contribution in developing "Renewable Energy in United Kingdom - (UK)" , encouraging the growth of clean technologies in use by renewable source for the protection of the environment and reducing the use, both for heating and electricity consumption of fossil fuels. The areas of chosen Government intervention are wind and marine energy. To achieve this, the British Government issued a package of measures to safeguard the funds and tools to ease citizens who are collectively organized to produce or save the energy they consume, such as, for example, a 10 million GBP fund to support community initiatives for energy production in addiction to a similar 15 million GBP fund reserved for rural communities. OSS (One Stop Shop) offices were established to offer users advice in planning and implementation of projects. A competition was then set up with a big sum of money as its reward for the best community at getting more energy saving. A fund was issued to finance BESN (Big Energy Saving Network), a real door-to-door program indeed, to help poor families to save on their phone bills.

Issues such as network connectivity, lack of skilled labor and similar issues related to processes, insted, must be overcome to ensure a smooth and successful transition to renewable energy.

In the UK there are also - Industrial Parks and Free Zones, where benefits are recognized. Free Zones are Birmingham Airport, Humberside, Liverpool, Southampton, Prestwick Airport, Port of Tilbury Port and of Sheerness. The main granted "Tax Incentives in United Kingdom – (UK) are about exemptions relating to taxes, VAT and other excise taxes under the following condition: goods must not have European origin and they must not be dealt within the community market.

The incentive programs are subject to frequent updates: the interested companies may apply to the Bright Business Consulting LLP in order to combine and monitor the opportunities that may be available to them. Furthermore, the analysis through a "Tax Planning" and a "Counselling Aimed at Company Investigations & Commercial Information " represents strong elements of incidence to enjoy higher profits, just in these areas the activities made by Bright Business Consulting LLP is synonymous of "Warranty & Assistance".



Bright Business Consulting LLP
58/60 - Kensington Church Street


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