LLC Tax for Non-Residents: What Taxes Will Be Liable for in the USA?

LLC Tax for Non-Residents: What Taxes Will Be Liable for in the USA?

Are you a non-resident LLC owner in the USA? Wondering what taxes that you may be liable for? Keep reading this blog as we will unravel what you need to know about LLC tax for non-residents and provide essential insights to help you comply with the IRS tax rules and regulations.

LLC Tax for Non-Residents: Types of Taxes Non-Residents are Liable for

If you are a non-resident individual or a foreign company looking to establish a Limited Liability Company (LLC) in the United States, it is important to understand the tax implications that come with it.

While LLCs are a popular choice for businesses due to their flexibility and liability protection, the tax requirements for non-resident LLCs can be complex depending on various factors.

In this blog, we will break down the key tax considerations you should be aware of to help you navigate the U.S. tax landscape affecting your non-resident LLC and ensure compliance with the Internal Revenue Service (IRS) regulations.

Understanding LLC Tax for Non-Residents

Before we proceed into the tax obligations, let’s first clarify what a non-resident LLC is. A non-resident LLC is an LLC formed in the United States but owned by non-resident individuals or foreign entities.

Non-resident LLCs can engage in various business activities in the U.S., such as buying or selling real estate, conducting business operations, or investing in U.S. companies.

However, the LLC tax for non-residents differs from that of LLCs owned by U.S. residents or citizens.

Federal Income Tax for Non-Resident LLCs

As a non-resident LLC, you are subject to federal income tax in the U.S. on income that is effectively connected with a U.S. trade or business (ECI). ECI generally includes the income derived from regular, continuous, and substantial activities in the U.S.

This can include income from sales of goods or services, rents, royalties, and interest, among others.

To report your ECI, you must file Form 1120-F, U.S. Income Tax Return of a Foreign Corporation, with the IRS. The tax rates for non-resident LLCs are the same as those for foreign corporations, with a flat rate of 21% on ECI.

However, additional tax treaty benefits may be available, depending on your country of residence, which can lower the tax rate or provide exemptions.

State Taxes for Non-Resident LLCs

In addition to federal taxes, another LLC tax for non-residents is state tax. Each state has its own tax laws, and the tax treatment of non-resident LLCs can vary widely from state to state.

Some states impose a state-level income tax on non-resident LLCs, while others may impose franchise taxes, sales taxes, or other taxes.

You need to research and understand the tax laws of the specific state(s) where your LLC operates or owns property to ensure compliance. Failure to comply with state tax requirements can result in penalties, interest, and other legal consequences.

Consider consulting with a tax professional or attorney with expertise in state tax laws to ensure you meet all your obligations.

Withholding Taxes for Non-Resident LLCs

Another critical aspect of LLC tax for non-residents is withholding taxes. Withholding taxes are withheld from certain payments made to non-residents, such as wages, rents, royalties, and dividends.

The withholding tax rates vary depending on the type of income and the applicable tax treaty, if any.

As a non-resident LLC, you may be required to withhold taxes on payments made to foreign employees, contractors, or shareholders. Failure to withhold and remit the required amount of withholding taxes can result in penalties and interest.

It’s essential to understand the withholding tax requirements and ensure compliance to avoid any legal or financial repercussions.

Tax Planning Strategies for Non-Resident LLCs

As a non-resident LLC, proper tax planning can help you optimise your tax liabilities and minimise your tax burden. Here are some tax planning strategies that you may consider:

Tax Treaties

Review the tax treaty between your country of residence and the U.S. for potential benefits such as lower tax rates or exemptions.

Expense Deductions

Take advantage of various expense deductions the IRS allows, such as business, rental, and interest expenses, to reduce taxable income and lower tax liability.

Timing of Income and Expenses

Correctly timing the recognition of income and expenses can impact tax liability, such as deferring income to a later year or accelerating payments for expenses.

Consult with Tax Professionals

Work with qualified tax professionals or accountants knowledgeable in U.S. tax laws and have experience with non-resident LLCs to implement effective tax planning strategies tailored to your specific situation.

Frequently Asked Questions

  • Can a non-resident LLC be subject to state-level taxes in multiple states in the USA?

    Forming an LLC in the US as a non-resident typically involves following the same steps as a US resident, which are:
    – Choosing a state
    – Selecting a unique business name
    – Filing the necessary formation documents with the state
    – Appointing a registered agent and obtaining any required licenses or permits.
    Research state requirements and seek legal or professional help to ensure compliance.

  • Which state is best to form LLCs for non-residents? 

    The ideal state for forming a non-resident LLC in the US depends on factors like business goals, tax implications, and legal requirements.

    Delaware, Nevada, and Wyoming are popular choices for non-resident LLCs due to favorable business laws. Consult with a business advisor or tax professional to choose the best state based on your unique needs.

  • Can a non-resident LLC claim tax credits or deductions for taxes paid in the USA in their home country?

    Depending on the tax treaty between the home country of the non-resident LLC owner and the USA, it may be possible to claim tax credits or deductions in the home country for taxes paid in the USA.

    You may need to consult with tax professionals in both countries to determine the availability and eligibility for such tax benefits.


Being aware of the types of taxes and tax planning strategies can help your business stay compliant and avoid potential legal issues. With a proper understanding of IRS regulations, it’s possible to minimise tax liabilities and operate a successful non-resident LLC.

Consult Sterlinx Global for further tax or accounting advice on your Non-Resident LLC.

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Types of UK Taxes: When and How to Pay

Types of UK Taxes: When and How to Pay

If you are still confused about UK taxes, read on as we uncover when and how to pay them. Avoid the dreaded penalties and fines; read this blog post to stay on top of your tax obligations!

When and How to Pay Different Types of UK Taxes?

Whether you have a business or a job, you must know how challenging it is to be tax compliant all the time.

With this, you need to be able to grasp the basics of different UK taxes if you want to avoid losing money from costly penalties and fines from HM Revenue & Customs (HMRC).

In this blog, we will explore these UK taxes, when they are due, and how to pay them. We will break down the information into easy-to-understand sections so you won’t feel overwhelmed. Let’s get started!

Value Added Tax (VAT)

VAT is the most common type of tax that is present in goods and services that you buy and sell. 

Once your business exceeds the current threshold of £85,000 turnover per annum, you must register it for VAT. This can be done online through the HMRC website. Once registered, you will need to submit VAT returns and make payment to HMRC.

The due dates for VAT payments are usually one month and seven days after the end of the VAT accounting period. The VAT accounting period can be quarterly, monthly, or annually depending on your business needs. 

It is recommended to consult with a tax professional to ensure compliance with HRMC VAT regulations.

Corporation Tax

Corporation Tax is a tax on the profits of limited companies, foreign companies with a UK branch or office, and unincorporated associations.

A corporation should register for Corporation Tax within three months of starting the business. They can register online through the HMRC website.

Regarding tax payment, paying Corporation Tax is typically up until nine months and one day after the end of the accounting period. The accounting period is usually the financial year of the business. 

For more detailed advice on their company accountants, corporations may consult an accountant to help them comply with HRMC rules.

Income Tax

Income Tax is a tax on the income you earn from your business. If you are a sole trader, you will pay income tax on your profits. If you are a limited company director, you will pay income tax on the salary you receive.

The due date for income tax payments is generally on the 31st of January after the end of the tax year. The tax year runs from the 6th of April of one year to the 5th of April of the following year.

To prepare for timely income tax payments, maintain an accurate record of your income and expenses throughout the year. You will need this to compute your taxable income and, ultimately, income tax payable.

If you are unsure how to go about your income tax, seek professional advice from an accountant.

National Insurance Contributions (NICs)

NICs are a form of social security tax that goes towards funding state benefits, such as the State Pension, Maternity Allowance, and Jobseeker’s Allowance.

The amount of NICs you pay depends on your income and your employment status. If you’re employed, your employer will deduct NICs from your salary before you receive it. If you’re self-employed, you must calculate and pay your own NIC to HMRC twice yearly, in January and July.

For a more detailed and accurate reference of the different employment statuses and the NIC payment computation, visit the HMRC website. You may also consult an accountant for accurate calculations, especially if you are self-employed.

Capital Gains Tax

Capital Gains Tax (CGT) is a tax on the profit you make when you sell or dispose of an asset that has increased in value. Your income and the amount of profit you’ve made will determine the CGT you need to pay to HMRC.

In addition, keep in mind that CGT is not just limited to UK assets. If you’re a UK resident and sell an asset overseas, you may still be liable to pay CGT.

The due date for CGT payment is usually on the 31st of January following the end of the tax year in which the disposal was made. 

Inheritance Tax

Inheritance Tax (IHT) is a tax on the estate of a deceased person. If you inherit an estate, you may be liable to pay IHT if the estate is worth more than the current threshold of £325,000.

IHT is payable on the portion of the estate that exceeds the threshold. However, if the deceased left everything to their spouse or civil partner, there is usually no IHT to pay.

The due date for IHT payment is typically six months after the end of the month the person died. 

For both CGT and IHT, it is best to consult with an accountant to ensure compliance with the rules around these complex types of UK taxes.

Frequently Asked Questions

  • Can I claim tax relief for working from home?

    If you’re an employee working from home, you may be eligible to claim tax relief for additional expenses, such as heating and electricity. You may further check this through the HMRC website.

  • What is the difference between a tax credit and a tax deduction? 

    A tax credit is an amount subtracted directly from your tax liability, while a tax deduction reduces your taxable income, which in turn reduces your tax liability.

    Tax credits are generally more valuable than tax deductions since they reduce your tax liability pound for pound. 

  • What happens if I don’t pay my taxes on time?

    You may face penalties and interest charges. HMRC can also take legal action against you to recover the unpaid taxes and push criminal charges in case of habitual, deliberate non-compliance.


Understanding UK taxes and their payment requirements is of utmost importance for anyone doing business or working in the country since each type of tax has its own rules and deadlines for payment. 

If you need professional advice about your tax compliance, visit us at Sterlinx Global.

Related posts to Types of UK Taxes

How Do You Know How and When to Pay Your UK VAT? Easiest ways to know to file your VAT

VAT in the UK: When to preferably talk to Professional Accountant or Tax Adviser

Non-Compliant to UK Tax Laws: How Can HMRC Check Your Personal Bank Account, if you are non-compliant to the UK taxation laws

Ecommerce Management Accounting for Amazon-Based Business

Ecommerce Management Accounting for Amazon-Based Business

Discover how effective financial management can drive success in your online business. From pricing strategies to inventory management and growth planning, learn from this blog how management accounting can empower your Amazon or e-commerce business with data-driven decision-making and higher profits!

Ecommerce Management Accounting: Definition, Purpose, and Techniques

Table of contents (automated) 

In today’s fiercely competitive era of e-commerce, running a successful Amazon or online business requires more than just listing products and fulfilling orders. It requires strategic financial management and decision-making.

That’s where management accounting comes into play, providing you with the tools and insights needed to make smart financial decisions that can impact your profits and overall business success.

In this blog, we’ll delve into how effective management accounting can help you optimise pricing strategies, track and control costs, manage inventory efficiently, and plan for growth. Let’s start!

What is Ecommerce Management Accounting?

Before we move into the benefits of e-commerce management accounting, let’s first understand what it is. Management accounting is collecting, analysing, and interpreting financial data to assist business owners and managers in making strategic decisions.

Unlike financial accounting, which focuses on reporting historical data for external stakeholders, management accounting is forward-looking and aims to provide relevant and timely information for internal decision-making.

How Can Ecommerce Management Accounting Help Your Amazon or Online Business?

Listed below are the benefits of having a proper e-commerce management accounting for your Amazon or any other online business:

Ecommerce Management Accounting: Accurate Costing for Product Pricing

One of the critical aspects of running a successful online business is pricing your products competitively.

E-commerce management accounting can help you accurately determine the cost of producing or acquiring your products, including direct costs such as materials and labour, as well as indirect costs such as overhead expenses.

This information can empower you to set prices that ensure a healthy profit margin while remaining competitive in the market.

Ecommerce Management Accounting: Budgeting and Financial Planning

Effective budgeting and financial planning are essential for any business, including Amazon or online businesses.

E-commerce management accounting can provide you with the tools and techniques to create realistic budgets, set financial goals, and monitor your actual performance against those goals.

This can help you identify areas where you may be overspending, adjust your spending patterns, and make more informed decisions to achieve your financial objectives.

Ecommerce Management Accounting: Performance Measurement and Analysis

Monitoring and evaluating your business performance is crucial for identifying areas of improvement and maximising profits.

E-commerce management accounting can provide you with various performance measurement techniques, such as key performance indicators (KPIs), variance analysis, and trend analysis, to assess how well your business is performing.

By analysing this data, you can identify strengths, weaknesses, opportunities, and threats to your business and take corrective actions accordingly.

Ecommerce Management Accounting: Inventory Management

Inventory management is critical in running an online business. Overstocking or understocking can result in lost sales or excess holding costs, which can directly impact your profits.

E-commerce management accounting can help you optimise your inventory levels by providing you with data on inventory turnover rates, carrying costs, and reorder points.

This can help you make informed decisions about when to reorder, how much to order, and how to manage your inventory effectively to maximise profits.

Ecommerce Management Accounting: Cash Flow Management

Cash flow is the lifeblood of any business, especially online businesses where cash from a sale is usually received at a later date. Therefore, proper cash flow management is essential to ensure smooth operations and avoid liquidity issues.

E-commerce management accounting can provide you with tools to forecast your cash inflows and outflows, track your cash flow patterns, and identify potential cash flow gaps.

This can assist you in taking proactive measures such as managing your payables and receivables effectively, securing financing, and optimising your cash flow to avoid any disruptions to your business operations.

Ecommerce Management Accounting: Decision Support

As the e-commerce industry aggressively develops, your decisions as an online business owner need to be made quickly and accurately. Management accounting can provide you with the necessary financial information and analysis to support your decision-making process.

Whether it’s evaluating new investment opportunities, assessing the profitability of different products or sales channels, or deciding on the most cost-effective shipping options, e-commerce management accounting can provide you with the data and insights you need.

Ecommerce Management Accounting: Business Strategy and Growth Planning

As an online business owner, you need to have a long-term vision and plan for growth. Ecommerce management accounting can assist you in developing and implementing your business strategy by providing you with financial data and analysis to evaluate different growth opportunities.

This can include assessing the profitability of expanding into new markets, launching new products, or optimising your pricing and promotional strategies.


With the right financial information and analysis at your fingertips through e-commerce management accounting, you can confidently solve different challenges and seize opportunities coming your way by making strategic decisions that drive your business to the top.

Consult Sterlinx Global for further management accounting advice for your Amazon or online business.

Frequently Asked Questions

How can I implement e-commerce management accounting practices in my business?

Implementing e-commerce management accounting practices in your Amazon or other online business involves:

– setting up an effective accounting system
– capturing relevant financial data
– analysing and interpreting the data
– and using it for your decision-making and planning processes.

Consider hiring a qualified accountant or utilising accounting software to streamline your financial management practices

Is e-commerce management accounting relevant for small-scale businesses as well? 

Yes, e-commerce management accounting is relevant for businesses of all sizes, including small-scale Amazon or e-commerce businesses.

It provides financial insights and decision-making support that can be valuable for optimising pricing, managing costs, inventory, cash flow, and planning for growth, regardless of the scale of your business.

What are some common challenges in implementing e-commerce management accounting in my business?

Some common challenges in implementing management accounting in Amazon or online businesses include:

– obtaining accurate and reliable financial data
– aligning financial data with business objectives
– ensuring data integrity and security
– identifying relevant key performance indicators (KPIs)
– and integrating management accounting processes into the day-to-day operations of the business.

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Top 10 Free Accounting Software with VAT Tax

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What is Cross Border VAT: A Complete Guide on Cross-Border VAT

What is Cross Border VAT: A Complete Guide on Cross-Border VAT

Don’t let cross-border VAT regulations leave you feeling confused and frustrated. In this blog, we will answer “What is Cross-Border VAT?” and other underlying topics you need to understand. So keep reading to learn more.

What is Cross Border VAT: A Complete Guide 

What is Cross Border VAT? When goods or services are bought or sold across international borders, it can be challenging to determine how VAT should be applied and how much businesses have to collect and pay.

In this blog, we will provide a comprehensive guide on cross-border VAT, including what it is, different VAT obligations, rules within the EU and outside the EU, and key considerations for businesses that engage in cross-border transactions.

Whether you are an importer or exporter, this guide will help you understand your obligations and responsibilities regarding cross-border VAT and how to ensure that you remain compliant with the relevant regulations.

What is Cross Border VAT?

Let’s start with the basics. Cross-border VAT refers to the value-added tax (VAT) when goods or services are bought or sold across international borders. VAT is a consumption tax, meaning that it is levied on the final consumer of the product or service.

However, when goods or services are sold between businesses in different countries, it can be challenging to determine the correct VAT rate and who is responsible for paying the tax.

What is Cross Border VAT per Supplier Location?

If you are a business owner who buys goods or services from suppliers in different countries, you need to be aware of the VAT obligations that apply depending on the location of your supplier. In general, there are three scenarios:

EU Suppliers

If your supplier is located within the European Union (EU), they should charge you VAT at your local rate. However, if you are a VAT-registered business, you can often reclaim this VAT through your VAT return.

Non-EU Suppliers

You should not be charged VAT if your supplier is outside the EU. Instead, you may be liable for import VAT and customs duties when the goods arrive in your country.

Digital Services

If you are buying digital services, such as software or streaming services, even from a supplier outside the EU, they may be required to charge you VAT under new rules that came into effect in 2019. Read more of these VAT rule changes on the HMRC website.

In addition, you can ask help from a tax advisor to clarify this for you, especially if you usually avail digital services for your business.

Cross-Border VAT per Customer Location

If you are a business owner who sells goods or services to customers in different countries, you must also understand whether you will charge VAT depending on their location.

EU Customers

If your customers are located within the EU, you should charge them VAT at their local rate. To do this, you need to register for VAT in the EU countries they are located, and this is a requirement before actually selling your goods and services.

However, if you sell to multiple EU countries, it may be a hassle for you to register for each, so you have the option to use the One-Stop Shop scheme for easier compliance. This is discussed in a separate blog post. You can also consult a tax advisor for further guidance.

Non-EU Customers

If your customer is located outside the EU, you should not charge them VAT. Instead, you may need to provide evidence that the goods have left the EU to support a zero-rated VAT sale of a registered business.

Cross-Border VAT per Customer Type

The VAT rules can also vary depending on whether you sell goods or services to another business or the final customer. Here are some key points to keep in mind:

Selling Goods and Services to Another Business

When selling goods or services to another business, cross-border VAT rules will depend on several factors, including the customer’s country, the nature of the transaction, and whether the customer is registered for VAT.

In general, if both the seller and the customer are VAT-registered and are both EU countries, the transaction will be considered an intra-community supply and subject to the reverse charge mechanism.

This means that as a seller, you still need to charge VAT, but your customer can claim this through their VAT return to lower their VAT liability.

This will continue even if your customer sells them again to another VAT-registered business, and the final customer will eventually pay the VAT.

Selling Goods and Services to the Final Customer

When selling goods or services to a final customer, the VAT treatment will depend on whether the customer is located within or outside the EU.

Suppose your customer is located within the EU. In that case, the VAT treatment will depend on the distance selling threshold of the country where the supplier is situated and the country where the customer is located.

If your sales exceed the distance selling threshold in your customer’s country, you should register for VAT in that country and charge the local VAT rate. 

If the customer is outside the EU, the transaction is generally treated as an export and is zero-rated for VAT purposes.

However, some countries may require the supplier to charge local taxes or duties on the sale, depending on the nature of the products or services sold.

Frequently Asked Questions

Do I need to register for VAT if I only make occasional sales to customers in another country?

It depends on the country where the customer is located and the volume of sales. In some countries, there are thresholds below which VAT registration is not required, while in others, registration is required for any sales to customers in that country.

Can I recover VAT on expenses incurred in another country? 

In most cases, you can recover VAT on expenses incurred in another country as long as your business is registered for VAT in that country.

This process is called VAT reclaim, and it allows you to reclaim the VAT you have paid on goods or services purchased for business purposes.

How do I know which VAT rate to apply to my products or services?

The VAT rate that applies to your products or services will depend on the country where the sale occurs.

Each country has its own VAT rules and regulations, and it’s important to understand the applicable rates and exemptions for each country where you do business. 

Generally, goods and services are classified into different categories for VAT purposes, and each category may have a different VAT rate. 


Navigating the waters of cross-border VAT can be a challenging task for businesses trading internationally, but by grasping the basics and referring to this post to answer “What is cross-border VAT?” you can easily avoid any potential issues and get through with your taxes.

Seeking professional help from a tax advisor can also be a good way to comply with complicated regulations confidently. Consult us at Sterlinx Global.

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Top 10 Things to Know About VAT in Europe for Amazon Sellers

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Financial and Yearly Accounts UK: A Quick Guide to the UK Corporate Tax System

Financial and Yearly Accounts UK: A Quick Guide to the UK Corporate Tax System

Save thousands of pounds on corporate taxes and allot more money for business operations by reading our quick guide to the corporate tax system of the UK.

Financial and Yearly Accounts—UK Corporate Tax

The UK corporate tax system is complex and ever-changing; hence, knowing where to start preparing for your corporation’s financial and yearly accounts can be challenging, as corporate taxes affect these deliverables.

But we are here to help. In this comprehensive guide, we will take you through everything you need to know about corporate tax. With our easy-to-follow tips, you will learn how to navigate corporate tax computations easily. Keep reading to learn more!

Who falls within the UK corporation tax regime?

All limited companies and some organisations are subject to the corporation tax regime. This isn’t only limited to local companies but also includes foreign ones with a branch or office in the country.

However, certain entities such as charities, non-profit organisations, and unincorporated associations are exempt. On the other hand, sole traders and partnerships are not subject to corporation tax; instead, they pay income tax on their profits.

Calculation of Taxable Profit/Loss

Calculating your taxable profit or losses is crucial in determining your corporation tax liability. Here’s a breakdown of the key factors that are considered in the calculation:

  1. Revenue. Your business’s revenue is the total amount earned from sales of goods or services during the accounting period.
  2. Cost of goods sold. This refers to the cost of producing or acquiring the goods or services sold during the accounting period, including materials, labour, and other related expenses.
  3. Operating expenses. Expenses incurred in running your business during the accounting period, such as rent, utilities, salaries, and advertising costs.
  4. Capital allowances. Capital allowances are tax deductions that businesses can claim for the depreciation of assets such as equipment, machinery, and vehicles.
  5. Losses. If your business has incurred losses during the accounting period, these can be carried forward to offset against future profits for up to 12 months.

To calculate your taxable profits, you need to subtract the total cost of goods sold and operating expenses from your revenue. You can then subtract any capital allowances and add any other income or gains earned during the accounting period. The resulting figure is your taxable profit.

Financial and Yearly Accounts UK: Corporation Tax Calculation

To better digest how to calculate your corporation tax liability, follow these easy, comprehensive steps:

Determine your accounting period

The accounting period is the time frame for which you will calculate your corporation tax. It can be up to 12 months long and is usually the same as your financial year.

Calculate your taxable profits

As discussed in the earlier section, the amount you computed is relevant in this step. This figure is calculated on your company’s tax return form (CT600).

Apply the corporation tax rate

The corporation tax rate is applied to your taxable profits to calculate the amount of corporation tax due. The current corporation tax rate is 19% (as of March 2023). 

However, this rate is set to increase to 25% in April 2023 for companies with profits over £250,000. For companies with profits below this threshold, the 19% rate will still apply.

Calculate any tax reliefs or deductions

Tax reliefs or deductions can help reduce your overall corporation tax liability. We have a separate section in this blog to discuss the items you can declare under tax relief or deductions.

Submit your corporation tax return

Once you have calculated your corporation tax liability (net of tax relief or deductions), you must submit your corporation tax return to HM Revenue and Customs (HMRC) and pay any tax that is due.

The deadline for submitting your tax return is usually 12 months after the end of your accounting period.

All these steps are just a backgrounder, and there are still tax concepts that might still need to be covered here. Therefore, it can still be challenging to calculate your tax dues and prepare the documents needed by HMRC and other regulatory bodies.

With that, in preparing your financial and yearly accounts, it is best to seek help from a tax professional or an accountant. They can provide assurance that you are compliant with the relevant tax regulations, as this is their line of expertise,

Tax Incentives and Deductions

Corporate tax incentives and deductions refer to the various tax breaks businesses can claim to reduce their corporation tax liability. Familiarise yourself with some of the most common corporate tax incentives and deductions available:

Research and Development (R&D) tax relief

Businesses that invest in R&D can claim tax relief of up to 230% of their qualifying R&D expenditure. This can be used against taxable profits, resulting in a lower corporation tax liability.

Patent box relief

This tax incentive provides a reduced corporation tax rate of 10% on profits earned from patented inventions. To qualify, businesses must hold qualifying patents and have carried out qualifying development work.

Creative Industry’s tax relief

Businesses operating in the creative industries, such as film, TV, and video games, can claim tax relief on their production costs. This relief can be up to 25% of the qualifying expenditure and can be used to offset taxable profits.

Employment allowances

This tax incentive allows businesses to claim a reduction in their employer NICs liability, up to a certain amount, for each tax year.

Annual Investment Allowance (AIA)

The AIA allows businesses to claim a tax deduction on the first £1 million of qualifying capital expenditure incurred annually. This can be used t against taxable profits, reducing the amount of corporation tax owed.

Frequently Asked Questions

  • What is the deadline for filing a corporation tax return?

    As discussed, the deadline for filing a corporation tax return is usually 12 months after the end of the accounting period.

    For example, if a business’s accounting period ends on 31 December, the deadline for filing the corporation tax return would be 31 December of the following year.

  • Can businesses carry forward losses to future years? 

    Yes, as we mentioned in the blog, businesses can carry forward losses to future years and offset them against future profits for tax purposes.

    The amount of loss that can be carried forward and the period for doing so depend on the type of loss and other factors. 

  • How are foreign profits taxed?

    Foreign profits are usually subject to corporation tax if a UK-resident company earns them. However, various rules and exemptions apply, depending on the circumstances.

    You may visit the HMRC website for a more detailed discussion on foreign profits.


Understanding the tax implications of your business activities and taking advantage of available tax incentives and deductions can make a significant difference to your bottom line. If you need professional advice about your corporate tax compliance, consult Sterlinx Global.

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