Understand UK’s Industry-Specific Tax Incentives Here Today!
At first glance, you might find the UK tax and incentives to be complicated – however, upon dissection, you’ll soon discover that it’s all straightforward. If you are a business owner or an entrepreneur, understanding the intricacies of industry-specific tax incentives in the UK will be truly beneficial for you! Learn all about the UK Industry-Specific Tax Incentives with us below.
Over the last years, UK has solidified its reputation for having one of the world’s most competitive tax system. This competitive tax regime has helped the UK to attract international investors and made the country a highly sought-after financial hub.
Why Are Industry-specific Tax Incentives Necessary?
Tax incentives are mightily beneficial to any industry – incentivized taxes allow companies to perform better, boost their economic growth and pushes them to do better in their fields. The UK’s tax industry-specific tax incentives help a particular niche economy, especially in the areas of job employment, research and development, as well as areas that lack progress and need improvement. Here are some of the tax incentives that you should be aware of:
1. R&D Tax Credit Regime
For companies that do research and development, they are entitled to UK’s R&D tax credit regime. The tax incentive’s repayable tax credit is 14.5%, which is crucial to most companies during their business’s early stages. The tax credit allows companies to be taxed less – however, not all companies that run R&D qualify for this scheme. Among the conditions that need to be met are such as the following:
- Must have tried to overcome uncertainty.
- The project could not have been worked out by a professional.
- The project should have found a new process, product or service or;
- The project should have improved on making said process, product or service better.
Check if your companies qualify here.
2. Patent Box
The Patent Box is an incentive meant for overseas and UK companies with a tax presence on innovative patented products or a UK branch. Patent Box is beneficial to companies as they will be subjected to a reduced corporation rate at 10%, rather than the current primary rate of 20%.
3. Tax for Creative Sectors
The UK has multiple tax incentives for creative business such as film production, television, animation, games, theatre and more. Established back in 2012, the UK government put forward this tax relief to encourage more cultural-based productions in the country. UK’s efforts in promoting and incentivizing creative sectors join countries such as Canada and Japan, which have been incentivizing their respective country’s creative sectors for much longer.
Need Help Navigating Taxation in the UK?
We understand that taxes are complicated, with much fewer taxes in a foreign country. If you’re planning to move or open a business in the UK, taxation is something you cannot afford to miss out on. There are plenty of accounting firms out there that specialize in researching foreign taxes – you can always engage with the professional services in one of these firms to clearly understand specific industry taxation and their respective incentives in the UK.