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This is our most popular service package and includes all of the services you will need to set up and operate a UK limited company. This package includes:
- Company set-up
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The 3 Key Benefits of a UK Limited Company
If your UK limited company is set up correctly, there will be many benefits but the three most likely to be crucial to its success are:
1. Low Capital Requirements and Set Up Costs
While most European countries require that you have substantial capital requirements to set up a limited company, there is no capital required to start-up in the UK. It should also be noted that lawyers and other notaries are absent from the start-up process which reduces the start-up costs significantly.
2. Unique Tax Optimisation Opportunities
In the last few years the traditional offshore jurisdictions and tax havens have experienced a relentless crack down. So-called ‘Black’ and ‘Grey’ lists have been published by the OECD and the G20 have vowed to fight tax evasion. Very few realise that the two biggest tax havens in the world are the US and indeed, the UK. Almost uniquely, for international clients there are a greater number of opportunities to set up tax efficient mechanisms especially in the UK and they are absolutely legal. Check out these three examples here:
- No withholding tax: There is no withholding tax on dividends by UK companies even if they are distributed to offshore holding companies.
- Non-domiciled taxation: Foreigners living in the UK don’t pay tax on overseas income (conditions apply).
- Offshore solutions: Using offshore companies in the Channel Islands or the Overseas British Territories together with a UK Limited Company is day to day business in the UK and will not raise an eyebrow as long as it is done correctly.
3. Very Flexible on Tax Deductible Expenses
The biggest advantage of a UK Limited company, in our experience, is the method in which expenses can be handled.
Compared with other major European countries such as France or Germany, the UK has very flexible rules regarding tax deductible expenses. The UK authorities are much less rigid than their counterparts in other countries. The UK system has no fixed rules, tables or lists of tax deductible items. The principal is simple and straightforward. All business expenses are tax deductible (as long as they are genuinely business related). You obviously need to apply some common sense here. If you need to invite your clients to a Formula One Grand Prix and that expense is reasonable in relation to your total sales this would be fine in most circumstances. However, if you spend half of your annual sales on expensive restaurants this may raise some questions. The British believe in the value of common sense, as this shows.
Obviously this applies more rigidly to the more mundane day to day expenses such as mileage and travel for example.
The seasoned entrepreneur will understand that this is a huge benefit. In most instances this is even more important than the low corporation tax rates. You may not have large profits in the first few years of your business anyway (hence you don’t worry about the tax rate) but you have significant expenses. You want to be able to operate those expenses through your business without worrying too much and thus creating a carried-forward loss which you can offset against future profits.