UK Corporation Tax for Non Residents: Company and Directors

Yes, in almost every case. HMRC says a company is resident in the UK for tax if it is incorporated in the UK, with certain exceptions, or if the central management and control of its business is in the UK. GOV.UK says a company classed as UK resident pays Corporation Tax on all its profits from the UK and abroad.

Notice what the test looks at: where the company was incorporated. It does not ask where the shareholders live, what passport the director holds or where the customers are. A UK limited company formed from abroad and selling online to clients in other countries is still a UK incorporated company.

The HMRC International Manual describes one exception that founders ask about. Where a company is UK resident under those tests but is also resident in a country that has a tax treaty with the UK, the company residence tie breaker in that treaty must be considered. If residence is awarded to the other country, HMRC calls the company treaty non resident, and it is not resident for UK tax purposes. The manual says the tie breaker now treated as standard is a determination by the tax authorities of the two countries, so ask an accountant before you rely on a treaty.

The rates are the same as for every other UK resident company. For the Corporation Tax year starting 1 April 2026, HMRC lists a small profits rate of 19% and a main rate of 25%, with Marginal Relief between £50,000 and £250,000 of profit. There is no separate rate based on where the owner lives.

GOV.UK says the £50,000 and £250,000 limits are proportionately reduced if the accounting period is shorter than 12 months, and by the number of associated companies. Its example: a company with 3 other associated companies divides the limits by 4, so they become £12,500 and £62,500.

GOV.UK also says a non UK resident company cannot claim Marginal Relief. That wording is about where the company is resident, and a company incorporated in the UK is normally UK resident, as set out above. For the rates in more detail, see UK Corporation Tax.

GOV.UK says you get the option to be set up for Corporation Tax when you register the company with Companies House. An active limited company must tell HMRC within 3 months of starting its tax accounting period. The return is due 12 months after the accounting period ends, and the tax usually 9 months and 1 day after it ends.

Living abroad changes none of these dates. GOV.UK is clear that you do not get a bill for Corporation Tax: the company must keep records, prepare the return, work out the tax and pay it by the deadline. HMRC may charge interest if the tax is paid late.

A founder abroad needs three things in place early: the company UTR, a way to pay HMRC from a UK business account, and the dates in the UK company compliance calendar.

GOV.UK lists a £200 penalty when the return is 1 day late and another £200 at 3 months. At 6 months HMRC estimates the bill and adds a penalty of 10% of the unpaid tax, and at 12 months another 10%. Late filing penalties are charged even if there is no tax to pay.

If the return is late 3 times in a row, GOV.UK says the £200 penalties are increased to £1,000 each. When a return is 6 months late, HMRC writes to say how much tax it thinks the company must pay. This is called a tax determination and it cannot be appealed.

A company with a reasonable excuse can appeal against a late filing penalty, but GOV.UK says the return must be filed first. These penalties are separate from the Companies House penalties for late annual accounts.

It depends on your own facts, so this is a question for an accountant. What GOV.UK says in general is that you usually have to pay tax on your UK income even if you are not a UK resident, that the country where you live might tax the same income, and that a double taxation agreement can give relief.

• Salary: the HMRC Employment Income Manual says that where an employee is not resident in the UK, the UK charge to tax is limited to earnings for duties performed in the UK. How that applies to a director who does all the work from another country is a point to confirm with an accountant.
• Dividends: the HMRC Savings and Investment Manual says the law limits the tax a non UK resident pays on what it calls disregarded income, which includes dividends from UK resident companies, and that the limit only applies when the individual has been non resident for the entire tax year. GOV.UK itself only says that special rules apply to dividends, so ask an accountant how the limit works for you.
• Personal Allowance: GOV.UK says a non resident gets it if they are a British citizen, a citizen of a European Economic Area country or have worked for the UK government during that tax year, and might get it under a double taxation agreement.
• Your home country: GOV.UK says each double taxation agreement sets out the country you pay tax in, the country you apply for relief in and how much relief you get.

If you do have to report UK income, GOV.UK says a non resident cannot use the HMRC online service for Self Assessment. You post a return with form SA109, use commercial software that supports it, or have a tax professional file for you. For the two ways of taking money out, read director salary vs dividends.

GOV.UK says a company is usually dormant for Corporation Tax if it is a new limited company that has not started trading, or if it has stopped trading and has no other income. Once HMRC has been told, it does not pay Corporation Tax or file a Company Tax Return unless it receives a notice to deliver one.

• Trading is wide: GOV.UK says it includes buying, selling, renting property, advertising, employing someone or getting interest.
• HMRC guidance says preliminary activity, such as writing a business plan or negotiating contracts, is not treated as trading.
• A company that has already had a notice to deliver a Company Tax Return must still file one online to show it was dormant for that period.
• HMRC guidance says a company that has not told HMRC it is dormant is still required to submit a return, and failure may result in penalties.

Dormant for HMRC does not switch off Companies House. GOV.UK says the company must still file annual accounts and a confirmation statement.

They are taxed on different profits. GOV.UK says a company classed as UK resident pays Corporation Tax on all its profits from the UK and abroad, while a company that is not UK resident but has an office or branch in the UK only pays Corporation Tax on profits from its UK activities.

HMRC has separate registration guidance for non UK incorporated companies, for example one trading through a dependent agent permanent establishment in the UK. It says the UTR is posted to the overseas registered office and can take 2 to 8 weeks to arrive. Whether a foreign business has a permanent establishment is a question of fact, so ask an accountant. For the VAT side, read UK VAT registration for non UK companies.