What Every Overseas Business in the UK Needs to Know
A comprehensive guide to UK company tax, VAT, corporation tax, tax‑planning and compliance for international firms expanding into the UK.
If your overseas company is establishing a UK presence, understanding UK company tax is one of the most critical elements from day one. From corporation tax and VAT to tax planning, reliefs and ongoing compliance obligations, the tax landscape in the UK can be complex, especially if you’re not based in the UK.
At Paul Beare, we support overseas companies in navigating this landscape smoothly, giving you confidence in your structure, processes and tax compliance so you can focus on growth.
Key Taxes for UK Companies
When we talk about UK company tax for overseas based operations, the main areas to consider include:
In each case, for overseas companies setting up in the UK, it’s about not just what you owe but how you structure your business, so your tax position is compliant, efficient and aligned with your broader strategy.
Corporation Tax:
The Basics
What is it?
If your business forms a UK resident company (or if you operate a UK branch/establishment), you’ll likely be subject to UK Corporation Tax on the taxable profits in that accounting period.
Profits subject to Corporation Tax include: trading profits, investment income and chargeable gains made by the company.
Residency and scope
A UK resident company pays tax on its worldwide profits (subject to reliefs and treaties).
A non UK company with a UK branch/establishment pays tax only on profits attributable to its UK activities.
Key practical steps
1
You must register for Corporation Tax when your company is created or becomes liable.
2
Keep accurate accounting records, file annual accounts and the company tax return, and pay the tax due by the deadline.
3
Plan for tax deductible expenses, capital allowances (including any full year expensing for qualifying plant & machinery), and reliefs such as R&D relief if applicable.
What overseas companies should consider
VAT – What You Need to Know
VAT registration and thresholds
If your UK entity makes taxable supplies of goods or services, you may need to register for VAT. The threshold for registration is £90,000 of taxable turnover in the last 12 months or expecting to exceed that in the next 30 days.
Overseas companies operating in the UK (for example via a UK branch or UK trading entity) should evaluate whether they’re making taxable supplies in the UK and thus need to register.
Charging VAT and reclaiming input tax
Once registered, you must charge the correct VAT rate (standard 20% for most goods/services) unless a reduced or zero rate applies.
You can reclaim VAT (input tax) on purchases made for the business, subject to rules on exempt supplies and partial exemption.
You must submit VAT returns (usually quarterly) and show: total sales, VAT charged, VAT reclaimed, etc.
VAT schemes and special rules
Small businesses may benefit from simplified VAT schemes such as the Flat Rate Scheme, Cash Accounting Scheme, or Annual Accounting Scheme.
Overseas businesses should also consider import VAT, reverse charge services, and simplified registration schemes for non UK established businesses. (GOV.UK)
Common pitfalls for overseas firms
Starting to trade in the UK without recognising VAT registration duty and inadvertently incurring penalties.
Mis classifying supplies (zero rated vs exempt) and losing entitlement to reclaim input VAT.
Failing to keep adequate VAT records, which leads to difficulties in audits or HMRC checks.
Ignoring cross border implications (services supplied to UK customers from abroad, movement of goods between UK and NI, etc.).
Tax Planning, Reliefs & Structuring for Growth
Why tax planning matters
For overseas companies entering the UK, tax planning is not optional – it’s part of structuring your UK entity so that your tax position supports your growth, rather than being a reactive compliance burden. Our tax planning support includes:
Reliefs that may apply
For overseas companies entering the UK, tax planning is not optional – it’s part of structuring your UK entity so that your tax position supports your growth, rather than being a reactive compliance burden. Our tax planning support includes:
R&D relief (for eligible research & development activities)
EIS/SEIS (for UK resident companies raising funds for growth) - may be less relevant for overseas owned companies, but useful for UK resident subsidiaries.
Capital allowances: schemes for plant & machinery, super deduction (historical), full year expensing.
Double tax treaty reliefs: ensure UK tax isn’t duplicated in your home jurisdiction.
Compliance and risk management
Compliance Checklist for UK Company Tax
Here are some must do items to ensure your UK Company Tax is set up properly:
Have you registered your UK company with Companies House and notified HMRC for Corporation Tax?
Are you maintaining UK accounting records (profit & loss, balance sheet, fixed assets) and ready to file annual accounts & tax return?
Are you monitoring when your UK taxable turnover may exceed the VAT registration threshold (currently £90,000)?
If VAT registered, are you submitting VAT returns on time, charging the correct VAT rate, and maintaining adequate documentation?
Are you reviewing whether simplified VAT schemes may benefit your business?
Are you examining your intra group transactions, transfer pricing and profit flows to ensure they comply with UK rules?
Are you ready for HMRC compliance checks, and do you have evidence of procedures to mitigate risk of involvement in tax evasion?
Are you claiming the tax reliefs and capital allowances you’re entitled to (e.g., for CAPEX, R&D)?
Are you integrating UK tax planning into your broader expansion strategy, not treating it as an afterthought?
Why choose Paul Beare Ltd
Your UK Tax Partner
When you work with us, you aren’t just ticking the tax compliance box, you’re building a tax efficient UK structure aligned with your global growth strategy. We specialise in helping overseas companies expand into the UK, and our tax service includes:
Strategic advice on UK company tax, entity selection and tax implication modelling
Assistance with registration for Corporation Tax, VAT and ongoing compliance
Tax planning support including capital allowances, reliefs, intra group structuring and repatriation strategies
Ongoing monitoring of UK tax changes and regulatory risks (including group reliefs, digital taxes, transfer pricing)
Coordination with your overseas tax advisors so you have a unified global view of your tax position