UK Tax Compliance Map

E-mail: lon4ww@evershinecpa.com
Ms. Anny Lin, speak both English and Chinese.
WeChat: annylin8008
Skype: annylin8008

GLA – United Kingdom Corporate Income Tax

GLA-UK-01 GLA Tax Entity

Question from client:
Is United Kingdom corporate income tax a national income tax? A local income tax? Or is there a national and local income tax?
What if the national income tax and the local income tax are levied separately or levied together?
What is the standard tax rate? What is the special tax rate?

Answer from Evershine RD:
Corporate income tax is imposed only at the national level.
UK does not impose state or local taxes on corporations’ profits.
The main national tax rate for companies is 19%.

GLA-UK-02 Registration

Question from client:
Which government unit is responsible for the collection of United Kingdom corporate income tax?
The registration of the country’s corporate income tax status, that is, the tax certificate number application procedure, paper certificate number application? Or online account application? URL?
What is the advance certificate number for applying for this certificate number?
Do I need to use the industrial and commercial certificate electronic card to apply?

Answer from Evershine RD:
Responsibility for administering taxation rests with Her Majesty’s Revenue and Customs (HMRC).
Most companies register for Unique Taxpayer Reference (UTR) at the same time as registering with Companies House.
Register within 3 months of starting to do business.
Sign-in to the business tax account using the company’s Government Gateway user ID and password to sign in at https://www.access.service.gov.uk/login/signin/creds.
You’ll need the company’s 10-digit UTR. This is posted to your company address by HM Revenue and Customs (HMRC) within 14 days of the company being registered with Companies House (incorporated).
You’ll need to register for Corporation Tax separately if you registered your company:

1. by post
2. using an agent
3. using third-party software

Corporation Tax Unique Taxpayer Reference (UTR) will be sent out by post to the company’s registered address as shown on Companies House.

GLA-UK-03 GLA Order (OD)

Question from client:
What is the order of United Kingdom corporate income tax return (information flow determines tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pays?
At the same time as the declaration and payment?

Answer from Evershine RD:
Deposit first (DF). Pay by installment first and declare later.

GLA-UK-04 Mechanism of Filing (MOF)

Question from client:
What is the return method for United Kingdom corporate income tax return (information flow determines the tax base)?
Filing cycle: monthly? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist?
If electronic filing is possible: website URL?

Answer from Evershine RD:
A company tax return must be filed within 12 months of the end of the company’s corporation tax accounting period, which is normally the financial year end.
File the Company Tax Return (CT600) for Corporation Tax with HM Revenue and Customs (HMRC).
All companies must submit their company tax returns electronically.
Sign in at https://www.access.service.gov.uk/login/signin/creds.
You can only use the paper form (CT600) if you unable to file online because you have a reasonable excuse or you want to file in Welsh.
You must also fill in and post form WT1 to explain why you’ve used the paper form.

GLA-UK-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for United Kingdom corporate income tax payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?

Answer from Evershine RD:
Corporation tax payments are normally made once a year with the due date being the first day of the 10^th month after the end of the accounting period, unless a company is defined as “large” or “very large”.
A company or group is large if it has taxable profits of more than 1.5 million pounds.
The large company must pay Corporation Tax in instalments quarterly.
Payments of corporation tax must be made electronically to the taxing authorities using the normal methods such as Direct Debit, Bankers Automated Clearing Services (BACS) or the Clearing House Automated Payment System (CHAPS).
Sign in at https://www.access.service.gov.uk/login/signin/creds.

VAT – United Kingdom VAT

VAT-UK-01 VAT Tax Entity

Question from client:
Is United Kingdom VAT National VAT? Local VAT? Or is there a national plus Local VAT?
What if the National VAT and Local VAT are levied separately or levied together?
What is the standard VAT rate? What is the special VAT rate?

Answer from Evershine RD:
U.K. VAT levied at national level.
There are no state, provincial, or local indirect taxes in U.K.
In the U.K., the following VAT rates apply:
Standard rate: 20%
Reduced rates: 12.5% and 5%
Other: Zero rate and exemptions

VAT-UK-02 Registration

Question from client:
Which government unit is responsible for the levying of VAT in United Kingdom?
The registration of United Kingdom’s VAT levy status, that is, the application procedure for VAT certificate number, paper certificate number application?Or online account application? URL?
What is the advance certificate number for applying for a VAT certificate number?
Do I need to use an industrial and commercial certificate electronic card to apply?

Answer from Evershine RD:
Administrative oversight of U.K. VAT is carried out by Her Majesty’s Revenue and Customs (HMRC), under the authority of the Commissioners for Revenue and Customs Act 2005.
You must register your business for VAT with HM Revenue and Customs (HMRC) if its VAT taxable turnover is more than GBP 85,000.
Most business can register online.
By doing this you’ll register for VAT and create a VAT online account (sometimes known as a “Government Gateway account”).
You need this to submit VAT returns to HMRC.
Registration by mail is permitted as an alternative, using form “VAT-1”.
You should get a VAT registration certificate via VAT online account or by post within 30 working days, though it can take longer.
You must register for VAT if your annual VAT taxable turnover goes over GBP 85,000 (the threshold) over the last 12 months, or you expect VAT taxable turnover to exceed GBP 85,000 in the next 30-day period. You can also register voluntarily.
Upon registration, a business is assigned a 9-digit VAT registration number of the format “123456789”.

VAT-UK-03WWT Order (OD)

Question from client:
What is the order of United Kingdom’s VAT declaration (information flow determines the tax base) and payment (fund flow)?
Pay first and then declare? First declare and then pay? At the same time as the declaration and payment?

Answer from Evershine RD:
Same period (SP): Filing of VAT return and pay the taxes.
The deadline for submitting the return online and paying HMRC are usually the same.

VAT-UK-04 Mechanism of Filing (MOF)

Question from client:
What is the return method for United Kingdom VAT declaration (information flow determines the tax base)?
Reporting cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: Website URL?

Answer from Evershine RD:
You usually submit a VAT Return to HM Revenue and Customs (HMRC) every quarter, although monthly accounting periods may be requested.
This submission period is known as ‘accounting period’.
You must submit a VAT Return even if you have no VAT to pay or reclaim.
The deadline for submitting the return online is 1 calendar month and 7 days after the end of an accounting period.
Electronic filing of VAT returns and electronic payment of VAT is generally compulsory in the U.K.
Complete and send your VAT Return online via https://www.access.service.gov.uk/login/signin/creds.
You need a VAT number and a VAT online account.
You can then submit your VAT Return using HMRC’s free online service or commercial accounting software.

VAT-UK-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for United Kingdom VAT payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
OCT payment at the bank counter?
Or the above methods coexist?

Answer from Evershine RD:
Usually, VAT-registered business submits their VAT payments to HMRC 4 times a year.
Certain large businesses are required to make payment on account if you exceed threshold of GBP 2.3 million owing in any period of 12 months or less.
This is an advance payment towards VAT bill.
U.K. VAT must generally be paid electronically.
There are several ways to make an electronic payment, including direct debit, internet or telephone banking, the U.K.’s “Faster Payments Service” or debit and credit cards over the internet.
Bank payments may be made from a bank account anywhere in the world.
Cleared funds must reach HMRC’s bank account by the due date, no matter which method of payment is chosen.
Businesses that must pay by check can do so by taking a check to a bank or building society and accompanying it with a paying-in slip that must be obtained from HMRC (these are preprinted with a registered payer’s unique details). These may take up to six weeks to obtain.

Please be aware of below Warning:
The above contents are digested by Evershine R&D and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

London Evershine BPO Service Limited Corp.
E-mail: lon4ww@evershinecpa.com
Ms. Anny Lin, speaks both English and Chinese.
WeChat: annylin8008
Skype: annylin8008

For how to exchange data files between your Finance Accounting System and Evershine Cloud Accounting Information System,
please send an email to HQ4lon@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable to your case.
Email address: dalechen@evershinecpa.com
Linkedin address: Dale Chen

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(version: 2024/07)

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