Running a UK Limited Company from India: Companies House, VAT and Tax Basics

Getting a UK limited company registered is the quick part. The harder part is knowing what the company owes the UK every year after that, especially when its owner lives in India. This is the list of what you actually have to do, and the dates it happens on.

It covers the basics. UK rules and fees change, so check the figures on gov.uk before you rely on them.

What Companies House expects every year

A confirmation statement

Once a year you confirm to Companies House that the company's details are correct: the registered office, directors, shareholders and people with significant control. There is a fee for this, currently in the region of GBP 34 online. Missing it can lead to the company being struck off the register.

Annual accounts

The company must file accounts. The deadline is nine months after the end of its financial year. A dormant or very small company can usually file simplified accounts, but it must still file.

Identity verification

Under recent company law changes, directors and people with significant control have to verify their identity with Companies House. New appointments are verified from the start, and existing directors get a transition period. If you are overseas you can usually verify using a passport. Do not leave this for the last week, since it is now part of keeping the company in good standing.

Where the company lives on paper

A UK company needs a registered office in the UK. Companies House has become stricter about what counts as an appropriate address: it must be a real place where legal documents reach you, not an address you cannot actually receive mail at. A company needs at least one director who is a natural person, and there is no rule that the director must live in the UK.

Tax: three different things

Corporation Tax

A company incorporated in the UK is generally a UK tax resident, so it pays UK Corporation Tax on its profits. The main rate is 25%, and companies with smaller profits pay 19% on profits up to GBP 50,000, with a sliding scale in between. The company registers with HMRC for Corporation Tax within three months of starting to do business, then files a company tax return each year. The tax is normally due nine months and one day after the end of the accounting period, and the return is due within twelve months.

VAT

VAT is a separate registration. The compulsory threshold is GBP 90,000 of taxable turnover over a rolling twelve months. A business based outside the UK that makes taxable supplies in the UK can have to register without waiting for that threshold, and that is the case founders in India most often miss. Work out whether your sales count as UK supplies before you decide you are under the limit. Voluntary registration is also possible if you want to reclaim VAT on costs.

PAYE

If you pay a salary to yourself or anyone else, the company registers as an employer. If you take no salary and only draw dividends, you may not need to.

Paying yourself from India

Dividends are paid out of profits that remain after Corporation Tax. As an Indian resident you are also taxed in India on what you receive, and the UK–India tax treaty affects how double taxation is relieved. This is a question for a tax adviser who knows both countries. A formation service should not guess it for you.

A simple yearly calendar

Banking

UK banks often want a UK address or a visit. Online business accounts are an option and some accept overseas directors, but approval depends on your business and documents. Start the application early and keep your company documents ready.

Where we fit in

We handle the UK company registration, with a registered office address. If you are still comparing, our earlier guide explains how to register a company in the UK from India. For tax advice, speak to an accountant who works with both UK and Indian rules.