Tax

As of 2024–2025, Corporation Tax in the UK is charged at 25% on taxable profits exceeding £250,000 per year. Small companies making profits below £50,000 pay a reduced rate of 19%. Between these two thresholds a tapered rate (Marginal Relief) applies, so the tax increases gradually as profits rise.

This rate is calculated on the company's profits after deducting legally allowable expenses, not on total revenue. If your company is dormant and makes no income, you will not pay corporation tax as long as no trading transactions take place.

We always recommend consulting a qualified UK accountant to determine your tax position accurately, especially if you deal with international clients or withdraw profits to your country of residence.

Yes, a UK Ltd is a British legal entity registered with Companies House, and is therefore subject to UK corporation tax on profits made within the UK or from British sources.

But being a non-resident director or shareholder does not automatically mean you pay UK tax on your personal income — that depends on the laws of your country of residence.

If your company sells services only to clients outside Britain and has no commercial presence (Permanent Establishment) in the UK, different rules may apply. Double-taxation treaties between the UK and the Gulf states and Egypt determine where each type of income is taxed.

Most importantly, distinguish between the company's tax (on the entity's profits) and your personal income tax (when you withdraw profits as salary or dividends). The Eteform team helps you understand the basics, but detailed tax planning requires an accountant who knows your position in your country of residence.

You must register your company with HMRC for Corporation Tax within three months of starting any actual trading activity — that is, from the date of your first invoice or first financial transaction. Registration is done online on the HMRC website, and you will receive a company UTR number.

If you formed your company through Eteform and chose the VAT or Fully Inclusive package, we handle the initial registration on your behalf. Even if you make no profit in the first year, registration remains mandatory as long as the company is active and not dormant.

Late registration may expose you to HMRC penalties starting from £100 and increasing the longer the delay continues. After registration, you must file the annual Company Tax Return within 12 months of the end of the financial year.

VAT (Value Added Tax) is a 20% tax charged on most goods and services in the UK. Mandatory VAT registration becomes required when your total annual sales exceed a threshold called the VAT threshold, currently £90,000 in any rolling 12-month period.

You can also register voluntarily before reaching this threshold if it benefits your business — for example, to reclaim VAT on your purchases. After registration, you issue your invoices at a price that includes VAT and submit quarterly VAT Returns to HMRC.

If you sell to clients outside the UK (such as the Gulf or Egypt), zero-rated or reverse-charge rules may apply depending on the nature of the service. Eteform's Fully Inclusive package (£200) includes VAT and PAYE registration, a suitable option if you plan to sell within the UK or via platforms such as Amazon UK.

The UK has comprehensive double-taxation treaties with most Gulf states, including the UAE, Saudi Arabia, Qatar, Kuwait, Bahrain and Oman. These treaties determine which country has the right to tax different types of income — company profits, dividends, salaries, and management fees.

In general, a UK Ltd pays corporation tax in the UK on its profits, and when you withdraw profits as a shareholder resident in a Gulf state, tax may also be charged in your country of residence — but the treaty usually allows the UK tax paid to be credited against what is due in your country.

The UAE, Qatar and Bahrain currently levy no personal income tax, which makes withdrawing profits from a UK company simpler for residents there. Saudi Arabia has begun to levy tax on foreign companies in some cases, so we recommend consulting a tax advisor familiar with the laws in both countries.

At Eteform we provide initial guidance and refer you to accountants specialising in double taxation when needed.

Yes, this is a very common question among Eteform clients from Egypt. A UK Ltd is subject to British corporation tax (19–25%) on its profits made in the UK.

When you withdraw those profits to your personal account in Egypt, they may also be considered income subject to Egyptian tax — especially if you are a tax resident in Egypt. Fortunately, Egypt and the UK signed a double-taxation treaty in 1975 that allows the UK tax paid to be credited against what is due in Egypt.

But the practical application requires careful coordination: tax returns in both countries, proof-of-payment documents, and sometimes a tax residency certificate. If you work as an Egyptian freelancer and formed a UK company, the company pays its tax in the UK and you declare your personal income in Egypt.

Do not try to hide the income — the Egyptian system has become more vigilant about international transfers. We recommend an Egyptian accountant who understands British companies to prepare your tax file correctly.

There are three main ways to withdraw money from a UK Ltd: salary, dividends, and allowable expenses (such as business travel or equipment).

Salary is subject to UK income tax and National Insurance contributions if it exceeds a certain threshold — but as a non-resident director you may not be subject to all of these obligations.

Dividends are subject to UK dividend tax (with a £500 annual allowance exempt), and additional tax may apply in your country of residence.

The most tax-efficient method varies by your country of residence: residents in the UAE or Qatar (with no personal income tax) usually benefit from taking dividends directly, while residents in Egypt or Saudi Arabia need more precise planning.

Withdrawing money via Wise Business or PayPal Business to your local account is a common and practical method. Most importantly: do not withdraw company money as if it were your personal account — keep clear records and invoices.

Consult a UK accountant and an accountant in your country of residence before your first withdrawal to avoid tax surprises.

A UTR (Unique Taxpayer Reference) is a unique 10-digit reference number issued by HMRC to every taxable entity in the UK — whether a company or an individual. Your company receives a UTR automatically when it registers for Corporation Tax, and it usually arrives by post within 7–10 working days.

You will need the UTR to file the annual Company Tax Return, to communicate with HMRC, and to open some business bank accounts. If you formed your company through Eteform with the tax registration service, we make sure you receive your UTR and send it to you with the rest of the company documents.

Without a UTR you cannot file any tax return or reclaim any amounts from HMRC. Keep this number in a safe place — do not share it publicly, but your accountant and bank will need it.