An Entrepreneur’s Guide to Taxes in the UK Versus the U.S.

If you are a self-employed business owner that travels, or you just want to know more about how business is conducted around the world, it’s important that you focus on tax implications. 

Taxes are a fact of life for business, so do everything you can to keep your tax situation straight. In learning about taxes, you will be in a great position to learn and expand, while avoiding some setbacks. 

In this regard, one of the most worthwhile things to know is the difference between UK taxes vs. US. To get a quick primer on a few of these differences, read the tips below. 

Taxes are Generally Lower in the UK

Since you run a self-employed business, it’s vital that you learn tax implications, such as the differences in UK taxes vs. US taxes.

Corporation tax is a common tax levied in both the United States and the United Kingdom. In the United States, this tax is set at between about 35% and 40%, while UK corporation tax is 20%, making it significantly lower. 

This bodes well for business owners looking to set up shop on UK soil. 

UK Taxes are Higher for Higher Earners

On the other hand, big earners in the UK tend to pay for it more. The tax rate for people who earn more than £$150,000 pay a tax rate of 45%, while this rate is more competitive in the United States. 

The rate for those who earn between £46,000 and £150,000 also pay a tax rate of 40%. 

But, you could say it evens out, since the UK has universal healthcare, while the United States is just now catching up in the number of healthcare options which are available. 

There Are Differences in Writeoffs Between the US and UK

When you are a self-employed professional, there are differences between the write-offs you get in the US as opposed to the UK. 

For example, both the United States and the United Kingdom have home office tax credit write-offs. But, there are differences in what constitutes a home office, and in the UK, you can also write off your home food expenses. 

Since tax relief is a huge part of any business strategy, it is vital that you understand these differences. Teaming up with financial professionals like RDP Associates can help you stay ahead of the curve with this sort of information. 

Keep Up With UK Taxes vs. US as a Self-Employed Professional

Since you now know more about UK taxes vs. US, you are in a position to handle them accordingly. 

The more you know about these tax issues, the easier it will be for you to manage your tax bill and your business as a whole. These tax issues in both countries change year after year, so it is important to keep researching as much as possible. 

As a small business owner, you always need to remain aware of the strategies guiding you. Let these tax implications help you out and comb through our archives for more business finance information.