The UK has several incentives for businesses, ranging from research and development credits to incentives for companies in arts and culture.
Have the correct documents to hand to help speed up your application. The common requirements from banks are:
- Your business plan, key people, markets and customers: This information covers what the firm will do, projected sales, income and expenditure, as well as key suppliers and customers in London and overseas. These details help avoid payments being classed as unusual and delayed or denied.
- Company structure chart: This information should cover ownership and respective percentage shares held down to an individual level. Banks ask for underlying documentation – certificate of incorporation, share registers, share certificates, partnership agreements and trust agreements – unless it is available on a public register.
- Identification and verification: A passport or driving licence is needed to verify the identities of key individuals. A recent bank statement or utility bill verifies addresses.
- Bank statements: If your company is a newly registered subsidiary of an existing company, you need to provide six months of statements from the parent company depending on where the initial funds come from and how much is invested. Your bank may also need bank statements from the beneficial owners, as well as an explanation of their source of wealth.
Content provided by Metro Bank. This information is intended for general guidance only. You should always seek professional advice.
The taxes you pay depend on the size and structure of your business. The common taxes are:
- Corporation Tax: Companies are currently taxed 25% of profits.
- Income Tax: This tax is generally deducted from an employee’s salary on a monthly basis through an employer-run system known as “Pay As You Earn” (PAYE).
- National Insurance Contributions (NICs): Both employers and employees are subject to the UK’s social security mechanism as a percentage of the gross salary paid to an employee.
- Value Added Tax (VAT): A rate of 20% is applied to most taxable goods and services, with a reduced rate of 5% or 0% applied in some instances. You may be charged UK VAT on goods and services that are supplied to you, but if you are a UK VAT-registered business, you can recover these payments by paying (or reclaiming) the net amount on your next VAT return.
Research and development (R&D) tax credits
R&D can be costly, but the UK has some of the most effective tax reliefs available in the form of R&D tax credits.
- R&D expenditure credit (RDEC): Calculated at 20% of your company’s qualifying R&D expenditure, in the form of a taxable above-the-line tax credit.
- SME scheme: Allows companies to deduct an extra 86% of qualifying costs from their yearly profit, delivering up to 33% of qualifying expenditure as refundable tax credits.
Creative sector tax relief
Eight targeted creative industry tax credits can result in a cash refund of eligible expenditure:
- Film Tax Relief (FTR)
- Animation Tax Relief (ATR)
- High-end Television Tax Relief (HTR)
- Children’s Television Tax Relief (CTR)
- Video Games Tax Relief (VGTR)
- Theatre Tax Relief (TTR)
- Orchestra Tax Relief (OTR)
- Museums and Galleries Exhibition Tax Relief (MGETR)
Retaining and incentivising your people is an important objective for most employers and companies. Share-based incentive arrangements give you a competitive advantage.
Content provided by BDO, Blick Rothenberg and Taylor Wessing. This information is intended for general guidance only. You should always seek professional advice.
A quick guide to patents
A scheme allows companies to apply a 10% rate of Corporation Tax to profits attributable to qualifying patents, whether realised as royalties or embedded in the sale price of products.
A broad range of sectors, including electronics, defence, pharmaceuticals, life sciences and manufacturing, can benefit.
To incentivise companies to retain and commercialise existing patents and to develop new, innovative patented products.
The regime also applies to some other IP rights, such as plant variety rights, regulatory exclusivity rights and supplementary protection certificates (SPCs).
How London & Partners can help
Our team offers free advice to potential investors, from startups to established companies. We can:
- Introduce you to our professional network of tax and law specialists.
- Connect you to networking groups.
- Advise on setting up in London.