Starting a business in
🇬🇧United Kingdom
Checked November 4, 2026 · How we score
Corporate tax
25%
Top income tax
45%
Setup from
$150
all-in, first year
Time to form
1 day
can be done remotely
Taxes in UK
| Corporate income tax | 25% 25% main rate on profits above GBP 250,000; 19% small profits rate up to GBP 50,000; marginal relief in between (about 26.5% effective on that band). R&D relief and 10% Patent Box available. |
|---|---|
| Personal income tax (top) | 45% 20% basic, 40% higher (over GBP 50,270), 45% additional (over GBP 125,140). Thresholds frozen until April 2031. Dividends: 10.75% basic, 35.75% higher, 39.35% additional from 6 April 2026; GBP 500 dividend allowance. |
| Tax system | Worldwide income |
| Capital gains tax | 24%18%/24% for most assets (24% for higher-rate taxpayers on shares); GBP 3,000 annual exempt amount; Business Asset Disposal Relief rate is 14% in 2025/26 and 18% from April 2026. |
| Dividend withholding (non-residents) | 0% |
| VAT / GST | 20% |
| Social security | Employer National Insurance 15% above GBP 5,000 (from April 2025); employee NI 8%/2%. VAT registration threshold is GBP 90,000. |
Forming a company in UK
| Usual entity | Private limited company (Ltd) |
|---|---|
| Minimum capital | $1 |
| Setup cost (all-in) | $150–$900 |
| Annual running cost | $900–$3,500 |
| Time to incorporate | 1 day |
| Form remotely as a foreigner | Yes |
| Local director required | No |
| Local address required | Yes |
| Owners on public register | Yes |
| Statutory audit for small companies | No |
| Business banking for non-residents | Moderate |
Residency and visas
No digital nomad visa; the Investor visa closed in February 2022. Founders use the Innovator Founder, Global Talent or Skilled Worker routes. Directors and persons with significant control must complete Companies House identity verification.
| Digital nomad visa | No |
|---|---|
| Golden visa | No |
| Ease of residency for founders | 4/5 (1 = easiest) |
Special tax regimes
4-year FIG regime
From 6 April 2025 new UK residents (not resident in the previous 10 years) pay no UK tax on foreign income and gains for their first 4 years.
Non-dom abolition (6 April 2025)
The non-dom remittance basis was abolished and replaced by residence-based rules; inheritance tax now depends on long-term residence.
SEIS/EIS and R&D relief
Tax-advantaged investment schemes (up to 50%/30% income tax relief for investors) and R&D credits make the UK attractive to startups.
Pros and cons
Why founders pick UK
- Incorporation in about 24 hours online for GBP 100
- No minimum share capital and no residency requirement for directors
- Excellent reputation with banks, Stripe and investors
- Large startup ecosystem with SEIS/EIS and R&D reliefs
Watch out for
- 25% corporation tax and dividend tax rising in April 2026
- Identity verification is now mandatory for directors and shareholders
- Non-residents struggle to open high-street business accounts without a UK address
- Directors' names and shareholders are public; a UK registered office is needed
- Non-dom regime gone; foreign income taxed after four years
Best for: Founders who need maximum credibility with banks and investors · VC-backed startups and fintech · Non-resident sellers who need a trusted entity
UK: common questions
Can a non-resident open a UK limited company?
Yes. Anyone aged 16+ can incorporate a UK Ltd online via Companies House for GBP 100 with a UK registered office address. Directors and persons with significant control must verify their identity, and there is no UK director residency requirement.
What is UK corporation tax in 2026?
25% on profits above GBP 250,000 and 19% on profits up to GBP 50,000, with marginal relief between those limits. Dividend tax rates for individuals rise by 2 points to 10.75% and 35.75% from April 2026.
Is the UK still a tax haven for foreigners after the non-dom abolition?
No. The non-dom regime ended on 6 April 2025. New arrivals get a 4-year FIG exemption on foreign income and gains, after which worldwide income is taxable. UK tax residence for 183+ days still triggers UK tax on UK-source income.
Can I get a UK business bank account without living in the UK?
It is possible with digital banks such as Wise Business or Airwallex, but traditional banks and many EMIs expect UK-based directors or a UK address. Expect extra KYC and delays for non-resident owners.
How much does it cost to run a UK Ltd per year?
Roughly USD 900–3,500: accounting (GBP 600–2,000), registered office service, and Companies House confirmation statement. Corporation tax, VAT filings and PAYE are separate.
Sources
- GOV.UK – Corporation Tax rates
- GOV.UK – Set up a limited company
- GOV.UK – Tax on dividends
- PwC Worldwide Tax Summaries – United Kingdom
Compare UK
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.