KNOWLEDGE BASE Taxation Triggers In The UK
The information on this page was current at the time it was published. Regulations, trends, statistics, and other information are constantly changing. While we strive to update our Knowledge Base, we strongly suggest you use these pages as a general guide and be sure to verify any regulations, statistics, guidelines, or other information that are important to your efforts.
Brexit Update:
Since the UK officially left the European Union on January 31, 2020, the relationship between the two has evolved and continues to be shaped by the ongoing implementation of the withdrawal agreement.
Key Dates:
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January 31, 2020: UK officially left the EU and entered a transition period that ended on December 31, 2020.
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December 31, 2020: The transition period ended, and the UK fully exited the EU single market and customs union.
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January 1, 2021: The UK-EU Trade and Cooperation Agreement came into effect, outlining the post-Brexit relationship between the two entities.
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2023/2024 Current: The UK and EU are still navigating the ongoing implementation and potential revisions of their post-Brexit relationship.
It's crucial for businesses operating in either the UK or the EU to stay informed about the latest developments and adjust their operations accordingly.
Resources for Further Information:
Taxation Triggers In The UK
When doing business in the United Kingdom, you need to consider whether your activities will trigger tax obligations even if you are not a United Kingdom-based business and have no physical presence in the United Kingdom. There are several ways in which you could trigger tax obligations by doing business in the UK or with UK residents.
Because business tax is far too complicated and company-specific, this tax information will only pertain to the other indirect taxes you might be responsible for when doing business in the UK. In general, if your business is based in the UK or the executive board is based in the UK, you will be liable for taxes on globally generated income. On the other hand, if neither your business nor the board is based in the UK, you will be liable for only tax on income generated in the UK, i.e., from sales (VAT) in the UK, a permanent establishment or representative, dividends, or licenses.
Because taxes are one of the most complex areas of law, and are completely business-specific, you should speak with a tax attorney and/or accountant to learn about and understand your tax obligations in the UK.
Value Added Tax
Value Added Tax (VAT) is a broad-based consumption tax levied on the sale of all supplies of goods and services in the United Kingdom. VAT is paid every time a customer buys a taxable good or service from a VAT-registered business. Suppliers essentially act as VAT collection agents. VAT applies to you if you are a VAT-registered business that supplies goods or services to customers. You must register for VAT with HM Revenue and Customs (HMRC) if your business’ VAT taxable turnover is more than £85,000.
For more detailed information on VAT, see Value Added Tax in the UK in the Product Localization section. As part of the UK Expansion Plan, Globig provides more information and steps in the UK Taxation Triggers Plan for determining if VAT applies to your company and how to manage it, if it does.
Business Property Tax
Most UK businesses face annual business property taxes levied by their local council. This applies to most non-domestic premises, but exemptions exist for some sectors like charities or farms. The responsibility for keeping your location updated rests with you as specific requirements might vary.
Tax rates depend on your property's valuation, which can fluctuate over time.
Company Car Tax
You may be responsible for tax for company cars and fuel you let your employees use in the course of business.
KNOWLEDGE BASE Taxation Triggers In The UK