Cutting Costs and Red Tape: the UK's Competitive Edge
Monday May 25, 2015
The business jungle can be wild and treacherous, filled with hidden pitfalls and silent predators. It's a place where simple survival isn't enough and every competitive advantage counts. The UK government wants the country to have the most competitive tax regime in the G20, and is taking a number of steps that could help you put your business at the head of the pack.
On the 1st of April 2015, the UK's main rate of Corporation Tax fell to 20%. This lightened the load of small and medium sized entities (SMEs) considerably, left the likes of France and Germany lagging badly behind and competes head-on with traditional low-tax jurisdictions like Switzerland, Luxemburg and Ireland.
In terms of dividends, the UK has never charged withholding tax (tax deducted at source) from outbound dividends, and since 2009 the overwhelming majority of inbound dividends can be received tax free as well.
Sharpening and maintaining your competitive edge takes innovation, and 2015 has seen the UK's R&D tax credits system tuned up to offer an enormous 230% tax reduction on any of your expenditure that qualifies! On top of that, the Patent Box incentive regime essentially gives you a 10% Corporation Tax rate on patent-related profits. Speak to our RIFT Resarch and Development team for more information.
It doesn't end there. Since the creative industries need to be fast on their feet to keep pace with the competition, there are special reliefs available for film, video game and high-end television production. The streamlined anti-avoidance rules of the Controlled Foreign Company (CFC) system go a long way toward preventing businesses from tripping up, and the Substantial Shareholdings Exemption is a significant competitive boost.
The tax system is just one of the unfortunate obstacles facing the business explorer, but the UK is a good place to be and RIFT is ideally positioned to guide you through the dangerous terrain. With a stable political system, an educated workforce, flexible labour markets and a widely spoken language, Britain is most definitely open for business.
Get in touch with RIFT Accounting to hear more ways we can help you sharpen your business claws.