United Kingdom

The UK is not a tax haven, and it doesn’t pretend to be. Its corporation tax main rate is 25%, and its tax authority, HMRC, is among the most capable in the world. So why does the UK keep appearing in international structures?

Two reasons. The private limited company (Ltd) can be formed online in a day, costs little to run and is taken seriously by banks, payment providers and clients everywhere. And the limited liability partnership (LLP) is tax-transparent: the partnership itself pays no tax, its members do – which, for non-resident members with non-UK income, can mean no UK tax at all.

This guide covers both as of 2026, including the new identity checks at Companies House and the end of the UK non-dom regime.

How UK company taxation works

The Ltd: 19% to 25%

Since April 2023, UK companies pay corporation tax on a sliding scale:

• 19% on profits up to £50,000.
• 25% on profits above £250,000.
• Marginal relief between the two, which produces an effective rate that climbs gradually from 19% to 25%.

The £50,000 and £250,000 limits are divided by the number of associated companies, and reduced for short accounting periods. Two companies under common control share the limits – so splitting one business into several companies doesn’t multiply your 19% band.

Dividends leave the UK without withholding tax. A non-resident shareholder receives the full dividend, and their home country decides what to do with it.

Worked example: £100,000 profit in a Ltd

At £100,000, the effective rate is about 22.75%. That is not cheap – but the UK is rarely chosen for the rate. It is chosen for trust, speed and simplicity.

The LLP: transparent by design

An LLP is a separate legal entity with limited liability, created under the Limited Liability Partnerships Act 2000. For tax purposes, though, it is generally treated as a partnership: the LLP pays no corporation tax, and each member is taxed on their share of the profit.

For a member who is not UK resident, the UK taxes only UK-source income. If the LLP has no UK establishment and earns its money from clients and activities outside the UK, the non-resident members’ profit shares are generally not taxed in the UK. The LLP still has to file accounts at Companies House and a partnership tax return with HMRC.

This is the classic “UK LLP for non-residents” structure. Three warnings:

• Your home country decides. Transparency means your country of residence usually taxes your share directly, as if you had earned it yourself – every year, whether you take the money out or not.
• Some countries see it differently. A few tax authorities classify foreign LLPs as opaque companies, with very different results. Check how your country treats it.
• UK source is easy to create. Offices, staff, dependent agents or UK clients can bring profits into the UK tax net.

Setting up a company or LLP

Formation

Companies and LLPs are registered with Companies House, mostly online. A straightforward Ltd is typically incorporated within 24–48 hours once all information is complete. There is no minimum share capital worth mentioning – £1 is common.

You need:

• At least one director (a natural person; they don’t have to live in the UK).
• A registered office address in the UK (a service address is fine).
• Details of people with significant control (PSCs) – anyone with more than 25% of shares or votes, or other significant influence.

For an LLP, you need at least two designated members instead of directors.

Identity verification (since 2025)

The Economic Crime and Corporate Transparency Act brought the biggest change in years. From 18 November 2025, identity verification with Companies House became mandatory:

• New directors and LLP members must verify their identity before they can be appointed or incorporate a company.
• Existing directors confirm their verification with the company’s next confirmation statement, during a 12-month transition period.
• PSCs have their own deadlines during the transition period.

Verification is done online through GOV.UK or through an authorized corporate service provider. It is not complicated, but it means the era of anonymous “nominee” setups is over – which, frankly, is fine for anyone with a legitimate business.

Ongoing obligations

• Confirmation statement. At least once a year, you confirm the company’s details at Companies House (with a fee).
• Annual accounts. Filed at Companies House; small companies can file simplified accounts, but these rules are tightening too.
• Corporation tax return. Filed with HMRC annually.
• VAT. Registration once taxable turnover passes £90,000, or voluntarily.
• Payroll. If you pay salaries, including to yourself as director.

Rough costs: formation plus a registered office service ranges from a few hundred pounds to about £1,000 through a provider. Annual accounting and filings for a small, simple company usually run from about £1,000 to a few thousand pounds, depending on activity and VAT.

Residency: what the UK company does not give you

A UK company is not a residence route. Forming or owning one gives you no right to live or work in the UK. Visas such as the Skilled Worker or Innovator Founder routes have their own, much stricter criteria and are outside the scope of this guide.

If you do move: from non-dom to the FIG regime

Since 6 April 2025, the UK no longer uses domicile as the basis for taxing foreign income. The old remittance basis for non-doms was abolished and replaced with a residence-based system:

• New arrivals who have been non-UK resident for at least the previous 10 tax years can claim the 4-year foreign income and gains (FIG) regime.
• During those four tax years, foreign income and gains can be exempt from UK tax, and they can be brought to the UK freely.
• After four years, you’re taxed on your worldwide income like any other UK resident.

The UK also moved inheritance tax to a residence-based system at the same time. For internationally mobile entrepreneurs, the UK is now a “four good years, then full tax” country – very different from the old non-dom world.

Banking

This is where the UK shines. A UK Ltd with a clear business is easy to explain to banks, payment providers and marketplaces. Non-resident directors don’t always get a high-street bank account easily, but electronic money institutions and business banking apps are widely used and accept many non-resident owners.

LLPs can be harder: some providers ask more questions about who the members are and where the money flows. Have your paperwork ready.

Living in the UK

The UK isn’t on most tax-minimizers’ lists as a place to live – but for those who move for work, family or London’s ecosystem, a quick overview:

The good

• Business culture. Deep capital markets, strong courts and a huge professional services sector.
• English. Obviously.
• Connectivity. London is one of the best-connected cities in the world.
• Four-year FIG regime. Attractive for newcomers with foreign investment income.

The less good

• Tax after year four. Worldwide taxation at rates up to 45%.
• Cost of living. London rents and prices are among the highest in Europe.
• Not in the EU. Since Brexit, no freedom of movement and no automatic EU market access.
• Weather. It’s a stereotype because it’s true.

Key considerations

• Place of management. A UK Ltd managed from Germany or Spain may be tax resident there. Where the directors actually decide things matters.
• Controlled foreign company rules. If you live in a high-tax country and own a UK company, your home country may tax its profits directly if they’re low-taxed – less likely with a 25% rate, more likely with an LLP.
• Transparency is double-edged. Great if you live somewhere with low or no personal tax; painful if you live in a high-tax country.
• Public register. Company names, directors, PSCs and filed accounts are public. Home addresses can be protected, but names can’t.

Who the UK suits – and who it doesn’t

A UK company works well for

• Founders who need credibility with international clients, marketplaces and payment providers.
• Non-residents living in low-tax countries who want a clean, respected trading company – or a transparent LLP.
• Holding structures that benefit from no dividend withholding tax and a large treaty network.
• People moving to the UK who can use the 4-year FIG regime.

It’s probably not for you if

• You want a low corporate tax rate. Look at Bulgaria, Cyprus or Dubai.
• You want residence through your company. The UK doesn’t do that; the UAE does.
• You want privacy from public registers. The UK is moving in the opposite direction.
• You live in a high-tax country and hope the LLP will fix that. It won’t; transparency sends the bill home.

For a pass-through alternative in the US, see the Delaware LLC guide. Put the options side by side in the country comparison.

Rates and rules in this guide were checked in September 2026. This is general information, not tax or legal advice – get your specific setup reviewed by a qualified advisor before you act.

Sources

• GOV.UK – Corporation Tax rates and reliefs
• Companies House – identity verification
• Limited Liability Partnerships Act 2000
• HMRC – Partnership Manual
• GOV.UK – Tax on foreign income
• PwC Worldwide Tax Summaries – United Kingdom