Yes. A UK limited company pays UK Corporation Tax even if you, its owner and director, live abroad (checked September 2026). HMRC treats a company incorporated in the UK as UK tax resident, with limited exceptions, so it’s taxed in the UK on its worldwide profits. Running it from Lagos, Karachi or Dubai doesn’t change that by default.

The second thing to know is VAT. If the company’s only UK presence is a registered or virtual office, HMRC may treat it as not established in the UK. A company in that position has no £90,000 threshold and must register for VAT once it makes, or expects to make, taxable sales in the UK.

This guide covers both, with HMRC’s own wording linked, then the Corporation Tax rates, the deadlines and penalties, and where double taxation treaties do and don’t help. For forming, running and banking the company as a whole, see our guide to a UK limited company for non-residents.

In this guide: Is the company UK tax resident? · Corporation Tax rates · Registering, paying and filing · VAT · PAYE · Double taxation treaties · Penalties · Checklist

Is a UK company run from abroad UK tax resident?

Usually, yes. HMRC’s International Manual says: “A company is resident in the UK for the purposes of the Taxes Acts if it is incorporated in the UK (with certain exceptions) or the central management and control of its business is in the UK” (HMRC INTM120030).

Note the “or”. Central management and control is a second way a company can become UK resident. It isn’t a way for a UK-incorporated company to stop being one. A UK-resident company pays Corporation Tax on its profits wherever they’re earned, with relief where the same profits are taxed abroad as well (HMRC INTM120010).

Correction: an earlier version of this guide said a UK company managed from outside the UK was “unlikely” to pay UK Corporation Tax unless it had UK-source income. That was wrong for a company incorporated in the UK, and we’ve removed it.

When another country also claims the company

If the company is run from another country, that country’s law may treat it as resident there too. Where the UK has a tax treaty with that country, the treaty’s tie-breaker rule can award residence to one side. If it awards it to the other country, the company is “treaty non-resident” and isn’t resident for UK tax purposes (CTA 2009 section 18, explained in INTM120030).

Don’t plan around that outcome without advice from a tax adviser in both countries. It depends on the specific treaty and on facts about where decisions are really made, and the result may simply be that the company is taxed at home instead.

Your own tax is separate

Everything above is about the company. Salary, dividends or loans you take from it are taxed under your own residence rules, and your home country may have rules about owning or funding a company abroad. Check those with an adviser at home before you form.

Corporation Tax rates

Taxable profits (12-month period, no associated companies)	Rate
£50,000 or less	19% (small profits rate)
Between £50,000 and £250,000	25%, reduced by Marginal Relief
Over £250,000	25% (main rate)

Source: GOV.UK: Corporation Tax rates (checked September 2026).

Worked example. HMRC’s Marginal Relief formula is 3/200 × (upper limit − profits), where profits and taxable profits are the same (HMRC CTM03925). Take a company with £120,000 of taxable profit in a 12-month period, no associated companies and no exempt dividends received:

Tax at 25%: £30,000
Marginal Relief: 3/200 × (£250,000 − £120,000) = £1,950
Corporation Tax due: £28,050, about 23.4% of profit

Two things shrink the £50,000 and £250,000 limits. A shorter accounting period reduces them proportionately, and so does each associated company. With 3 associated companies the limits are divided by 4, to £12,500 and £62,500 (GOV.UK: Marginal Relief). If you already own another company, at home or anywhere else, ask an accountant whether it counts as associated.

Registering, paying and filing

Get the UTR. HMRC posts the company’s Unique Taxpayer Reference to the registered office after incorporation. If it hasn’t arrived 15 working days after registration, request it online (GOV.UK). Make sure your registered office provider forwards HMRC letters promptly.
Register for Corporation Tax within 3 months of starting to trade or becoming active (business.gov.uk).
Pay 9 months and 1 day after the end of the accounting period. Companies with taxable profits over £1.5 million pay in instalments instead (GOV.UK: Pay Corporation Tax).
File the Company Tax Return (CT600) within 12 months of the end of the accounting period, even if the company made a loss or has no tax to pay (GOV.UK: Company Tax Returns).

Example: for an accounting period ending 31 March 2027, the tax is due by 1 January 2028 and the return by 31 March 2028. You pay before you file.

The first year often needs two returns. Your first accounts usually cover more than 12 months, but “the period covered by your tax return … cannot be longer than 12 months”, so “you may have to file 2 tax returns to cover the period of your first accounts” (GOV.UK: First company accounts and return).

The company also files with Companies House: annual accounts, and a confirmation statement at least once a year (£50 online). From 1 April 2028, accounts can only be filed using commercial software. Our non-resident UK Ltd guide sets out those deadlines, and every director must have verified their identity before the confirmation statement is accepted. See UK Ltd identity verification.

VAT: the threshold may not apply to your company

Most guides say you register for VAT when turnover passes £90,000. For a UK company run entirely from abroad, that may be the wrong rule.

The two rules

UK-established businesses must register if taxable turnover for the last 12 months goes over £90,000, or is expected to within the next 30 days (GOV.UK: Register for VAT).
Non-established taxable persons (NETPs) have no threshold. HMRC says a NETP “must register if you make taxable sales in the UK or expect to do so in the next 30 days”, and must tell HMRC within 30 days (VAT Notice 700/1, section 9, updated 5 August 2026).

Which one is a UK Ltd with a virtual office?

VAT Notice 700/1 section 9.2 says HMRC would normally consider a UK-incorporated company to have a UK establishment “as long as it is also able to make or receive business supplies at its registered business address”. Then comes the sentence that matters for most non-resident founders: “A registered, serviced or virtual office alone is not enough to create a business establishment.”

The same section says a UK establishment exists where essential management decisions are made and central administration is carried out in the UK, or where the business has a permanent physical presence with the people and equipment to make or receive supplies here.

So if your company is run from abroad and its only UK address is a registered office service, it may be a NETP. In that case it has to register from its first UK taxable sale, however small, and not when it reaches £90,000. Whether a particular sale counts as a UK taxable supply depends on what you sell and who you sell to. Get VAT advice on your own facts before the first sale, because “if you register late, you must pay VAT on any sales you’ve made since the date you should have registered”, and there may be a penalty on top (GOV.UK).

Correction: an earlier version of this guide gave only the £90,000 threshold. It didn’t explain that a UK company with just a virtual office may have no threshold at all.

Once registered

The standard rate is 20%. There’s also a 5% reduced rate and a 0% zero rate (GOV.UK: VAT rates).
Returns are usually due every 3 months. Filing and payment are usually due 1 calendar month and 7 days after the period ends, and you file even when there’s nothing to pay (GOV.UK: VAT Returns).

PAYE if the company pays you a salary

A company must register as an employer before its first payday, and no more than 2 months before. GOV.UK says that applies “even if you’re only employing yourself, for example as the only director of a limited company” (GOV.UK: Register as an employer). How a salary paid to a director living abroad is taxed, in the UK and at home, needs advice before you set one up.

Double taxation treaties: what they do and don’t do

A tax treaty between the UK and your country can stop the same income being taxed twice. It can also decide which country taxes a company that both claim as resident (see above). It doesn’t make UK tax disappear, and it doesn’t cover VAT.

GOV.UK’s tax treaties collection has pages for India, Pakistan, Bangladesh, Nigeria, the Philippines, the United Arab Emirates and the USA. It has no page for Nepal (checked September 2026). Our earlier version listed Nepal as a treaty country and said the UK had treaties “with more than 130 countries”. We couldn’t verify the count on GOV.UK, and Nepal was wrong, so both have been removed.

Read the actual treaty for your country, or ask an adviser to. Rates and tie-breaker rules differ from one treaty to the next.

Penalties for missing tax and filing deadlines

What’s late	Penalty (checked September 2026)
Company Tax Return	1 day late: £200. 3 months: another £200. 6 months: HMRC estimates the tax and adds 10% of the unpaid tax. 12 months: another 10%. Late 3 times in a row: the £200 penalties become £1,000 each (GOV.UK).
Accounts at Companies House	Up to 1 month late: £150. 1 to 3 months: £375. 3 to 6 months: £750. Over 6 months: £1,500. Doubled if late 2 years in a row (GOV.UK).
Accounting records not kept	£3,000 fine from HMRC, or director disqualification. Records must be kept for 6 years from the end of the last financial year they relate to (GOV.UK).

Older guides quote £100 for a late Company Tax Return. HMRC’s page now shows £200. Accountants report that this applies to returns with a filing deadline on or after 1 April 2026 (THP Chartered Accountants); HMRC’s page itself doesn’t give the date.

Checklist before the company’s first sale

Assume the company is UK tax resident. If you think a treaty makes it resident elsewhere, get that in writing from an adviser in both countries.
Decide whether the company has a real UK establishment or only a registered office service. If it’s only the office, get VAT advice before the first UK sale.
Diarise the UTR (15 working days), Corporation Tax registration (3 months after trading starts), and the first accounting period end.
Check whether any company you already own counts as associated, because that lowers the 19% and Marginal Relief limits.
Budget for an accountant or accounts software that can file iXBRL from April 2028.
Check your home country’s rules on owning a foreign company and on the income you take from it.

Where Bizstartz fits

Bizstartz works with founders outside the UK and U.S. who are choosing between a UK Ltd and a U.S. LLC. If the VAT and residence points above change your plans, a free 30-minute consultation is a good way to compare the two before you spend anything. For UK tax returns and VAT registration on your own facts, use a UK-qualified accountant or tax adviser. HMRC and Companies House make their own decisions.

This guide was researched with the help of AI tools and replaces our 2025 version, which wrongly said a UK company managed from abroad would usually escape UK Corporation Tax. Every rate, rule and deadline links to the HMRC or GOV.UK page it came from; those pages were checked on 17 September 2026. This is general information, not tax advice.

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UK Limited Company Tax Guide for Non-Residents (2026)