When businesses set up a subsidiary in the UK they have to understand the accounting and regulatory environment. Our team can help, offering advice and lots of services including tax and payroll. Work with some of the leading accountants Chelsea has today and choose Circle Cloud Accountants & Consultants.

Salaries

An issue some UK subsidiaries may have is paying tax on salaries. In the UK businesses need to pay tax at the source (PAYE). They also have to make National Insurance Contributions (NICs). It is vital a business keeps up with these payments for all employees working in the UK. Non-UK employees who do their work here also have to do PAYE. NICs are different. Generally if it is only a short term the employee will stay on their home system. If it is a longer stay though, they may need to pay NICs.

Corporate Income Tax

This is by far one of the trickiest topics and gets a lot of attention because some big businesses fail to pay enough tax in the UK. The rule is that a UK resident company is liable to corporation tax on the worldwide profits of the business. However it is possible for a group of companies to carry forward losses against profits in different parts of the group. In addition there are a number of things that may be deductible.

Tax Depreciation

It is possible to write off the cost of some assets against taxable profits thanks to capital allowances. This takes the place of depreciation. Many assets can be written down but they are primarily plant or machinery. This can include tools, vehicles, and even computers. Some fixtures in a building also qualify.

VAT

The current rate of value added tax in the UK is 20%. This must be added on to the price of many goods and services sold here. There are only a few supplies that are exempt, including education and health. In addition, if a business sells goods or services that are taxable they must register for VAT if:

• They exceed the VAT threshold in the previous 12 months. The limit is currently set at £85,000.
• Estimations suggest they will exceed the VAT threshold.

If a business is liable for VAT they must submit returns periodically. In addition they have to pay any tax they owe.

There are many other potential tax issues that UK subsidiaries may encounter. Circle Cloud Accountants & Consultantswould be happy to help. With the most reliable accountants Chelsea can offer in your corner, you have lots of support. Contact us today if you want to arrange a consultation.