Taxation is charged on a UK wide basis. The principal taxes are Income Tax payable by individuals, Corporation Tax (effectively income and gains tax for companies) Capital Gains Tax (a tax on disposal of capital assets) and Value Added Tax.

 

Most UK taxes are broadly similar to the equivalent tax in Ireland. However there are very significant differences in detail between the UK and Irish rules for each taxes.

 

There are different computation rules depending on the type of income involved. For example there are specific rules for employment income, investment and savings income and rental income. Pensions and Employee Share Options receive favoured treatment.

 

The taxation of the profits of trades and businesses are calculated on the basis of accounting profit, adjusted by special computation rules. There are particular rules in relation to allowances for capital expenditure and trading losses. Partnerships are taxed in much the same way as individuals.

 

The receipt of income in the UK creates administration obligations for individuals. These administration obligations apply even if there is no ultimate tax liability because of the availability of allowances, deductions and reliefs.

The receipt of employment and trading income creates a liability for both Income Tax and National Insurance contributions, the equivalent of social insurance in Ireland.

 

Capital Gains Tax arises on the sale of capital (or long term) assets. Individuals and companies who are neither resident or ordinarily resident in the UK are exempt from VAT/CGT. Capital Gains Tax was reformed significantly in 2008 and the general rate was reduced to 18%. There are special computation rules. There are exemptions and special treatment for certain types of assets and for the purpose of to encouraging investment.

 

Corporation tax is the equivalent of income tax and capital gains tax for companies. There are special rules in relation to calculation of Corporation Tax liabilities. Companies chargeable gains are also subject to special rules and considerations. The tax administration obligations of companies differ from those of individuals. To some extent, groups of companies are treated as a single economic unit and Corporation Tax provides certain reliefs which reflect this position.

 

Value Added Tax in England and Wales is broadly similar to that in Ireland. There are obligations in relation to registration and administration. There are VAT schemes to suit the needs of particular types of business. Special VAT considerations arise on imports and exports.

 

Businesses in England and Wales pay Business Rates on premises they occupy. Individual pay Council tax to their local authority. Stamp Duty Land Tax is payable on the transfer of property.

Income Tax

Capital gains Tax

Company Taxation

Value Added Tax

Other Taxes