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UK Corporation Tax

The Corporation Tax is a form of tax which is applied in the United Kingdom. This form of tax is applied on the profits which are being made by the associations and companies who are occupant for the purpose of tax; it is also applicable on the profits made by permanent establishments associated with non-resident associations and companies within the United Kingdom and who have their business in the European Union. Before the declaration of the corporation tax in the United Kingdom in 1965, same tax rates were used to be applied on both the individuals and the companies and they used to pay same amount of income tax based on their incomes along with an addition of tax on the profits which were being paid by the companies. However, in the year 1965, The Finance Act altered this overall structure of the taxes for associations and companies with the initiation of corporate tax that was planned on the structure and the fundamental rules of the income tax system on United Kingdom.

UK tax system consists of state and local taxes. National taxes refers to the income tax on individuals where as corporate income tax refers to the corporation tax, capital gains tax, tax on income from oil, inheritance tax, and value added tax (VAT), duties and excises, and stamp duties. National taxes in the UK account for over 90% of all tax revenues to the state budget. Local taxes include only the property tax, which accounts for about 10% of tax revenues. Any profit that was obtained in the UK is taxed regardless of where they live or the formal residence of the person or country of incorporation (Michael & Simon, 2011, pp. 10-50). In the case of individuals it can be understood as follows. Individuals who are not tax resident in the UK, pay tax only on profits in the UK. From outside the country incomes are not taxed.

For individuals who are tax residents of a domicile in the UK, tax is levied on any profits: as received in the UK and abroad. For individuals who are tax residents of a domicile in any other country except Britain received in England tax exempt. Profit received abroad is taxed only if it is imported into the UK. (In this case the United Kingdom is among the countries with preferential tax treatment). Domicile also affects the inheritance tax and capital gains tax.

Calculation of company taxation in the UK is based on the certified audit report (audited accounts), which is provided by the Inland Revenue (Inland Revenue) at the end of each financial year of the company. Tax year (Tax Year or Fiscal Year) in England begins April 6 and ends on 5th April the following year. However, the Company may, at its discretion, appoint for the fiscal year end.

Company is not required to become registered if its sales in the UK do not exceed £ 70 thousand company, which does not conduct active business, or all of its activities is an import-export should not become registered ...