UK International Trading Companies

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	Untitled Document UK International Trading Companies UK companies can conduct cross-border trade tax-efficiently in their own right. The chief reason for this is that UK corporation rates are comparatively low. The standard rate of UK corporation tax is 30%, payable on every £1 of profit when net profits equal or exceed £1.5 million. However, depending on the net profits of a company in a given accounting period, lower rates of tax may apply. A nil rate of corporation tax now exists for companies whose profits in an accounting period do not exceed £10,000. Small companies rate of tax There is a small companies rate of tax of 19% for companies whose net profits exceed £50,000 but do not exceed £300,000, with a marginal rate of tax applicable to profits between £10,001 and £50,000. For companies whose net profits exceed £300,000 but do not reach £1.5 million, there is also a marginal rate of tax, which has the effect of increasing the overall tax rate until the flat rate of 30% is reached at the £1.5 million profit level. Associated companies These thresholds (£10,000, £300,000 and £1.5 million) are reduced where the company in question is associated with one or more other companies (whether these companies are resident within or outside the UK) by being divided by 1 + the number of associated companies. In practice, therefore, a UK trading company with an offshore parent company will reach the 30% corporation tax bracket when its own profits equal or exceed £750,000. Advantages of UK trading companies in international tax planning UK trading companies can pay dividends to offshore parent companies entirely free of UK withholding taxation. Moreover, UK trading companies can claim relief from offshore taxation of overseas trading profits, and can often trade free of high foreign taxes in overseas countries in appropriate circumstances. UK companies often trade as sub-contractors for offshore contractors. Personnel and consultancy fees paid from the UK company to an offshore contractor are tax deductible, and depending on where the offshore contractor is located, and the turnover and asset values of the business, the UK tax deduction may be free of transfer pricing constraints. For further information on these services, please contact any of our specialists whose telephone, email and fax details are on this page. Alternatively, to provide us with preliminary instructions for a proposed UK company, please click here.

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	For further information (including charges), please contact any of the following: Click contact name to email Jason Reader +44 (0)117 918 1387 Rachel Flower +44 (0) 117 918 1326 Martin Palmer +44 (0)117 918 1321 Jordans Limited 21 St Thomas Street, Bristol BS1 6JS Tel: 0117 923 0600 Fax: 0117 923 0063 DX 78161 Bristol Email Location Map

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