FAQ
Tax — advanced questions
8 questions and answers on tax — advanced questions.
Tax — advanced questions (8)
What does Central Management and Control mean?
It is a tax concept that determines where the company is actually managed — decision-making meetings and where strategic decisions are made. Even with UK registration, if the actual management is entirely from outside Britain, the tax treatment and double-taxation treaties may be affected.
This is a specialist topic: do not rely on general articles alone. Form the company with clear records and consult an international accountant if your profits are large or you have companies in more than one country.
What is a Permanent Establishment?
A fixed presence or activity that may give a country the right to tax profits linked to that presence. An office, employees, or an agent who concludes contracts in a country may create a PE depending on the treaty.
Owning a UK Ltd while you work from Riyadh or Cairo does not automatically mean a PE in the UK, or vice versa — the details are precise. For large operations, consult an advisor before opening an office or hiring in a new country.
What is the Accounting Reference Date?
It is the financial year-end date for your company, on which the deadlines for the annual accounts and tax returns are based. It is set at formation (usually the last day of the month before the anniversary of incorporation, per Companies House rules). It can be changed later within limits.
Knowing this date helps you schedule your accountant and avoid penalties. Eteform reminds you of the deadlines linked to it.
When do I actually pay Corporation Tax to HMRC?
Corporation Tax is usually paid within 9 months and one day of the end of the accounting period, while the tax return is filed within 12 months. The deadlines differ if your first period is longer. Late payment generates interest and penalties. Even with zero profits you may need to file a return.
A UK accountant sets the calendar for you after the first year.
What are Micro-entity accounts?
A simplified regime for very small companies that meet legal thresholds for revenue, assets and employees. It reduces public disclosure compared with larger companies. Many Arab startup companies qualify in their first years. Your accountant determines whether you qualify.
Do not confuse them with Dormant Accounts — the latter are for companies with no trading transactions.
Should I add VAT to my invoices for clients in the Gulf or Egypt?
If you are not VAT-registered, do not add 20%. If you are registered, the rules for charging VAT to clients outside the UK depend on the type of supply and the client's location — digital B2B services may differ from selling goods within the UK. Do not assume every international invoice is zero-rated without checking.
Consult an accountant before your first VAT invoice to Arab or European clients.
What is Making Tax Digital and does it apply to me?
MTD is HMRC's system for digitising tax filing (especially VAT currently, with a planned expansion). If you are VAT-registered you will usually need compatible software to file returns digitally. Companies not registered for VAT may not be immediately bound in the same way.
When you register for VAT via a Fully Inclusive package we guide you to the basic requirements and refer you to the accountant when needed.
Can my company benefit from R&D Tax Credits?
Research and development credits are available for qualifying activities under HMRC rules — innovative software or genuine technical development may qualify, whereas routine work does not. The topic is complex and many claims are rejected if poorly built. Do not promise yourself a refund before a specialist assessment.
For serious SaaS, consult an accountant who understands R&D once you have clear profits or development expenses.