- A non-resident company pays UK corporation tax only on specific UK activities, such as trading through a permanent establishment, UK property income, or disposing of UK land.
- The main corporation tax rate is 25%, and non-resident companies without a UK permanent establishment always pay that flat rate with no small profits rate or marginal relief.
- You must register with HMRC within three months of becoming liable, and the CT600 return is due 12 months after your accounting period ends.
A non-resident company pays UK corporation tax only on profits from specific UK activities, not on its worldwide income. That means trading in the UK through a permanent establishment, earning UK property income, or disposing of UK land can all pull you into the net.
The main rate is 25%, and if your company has no UK permanent establishment, that flat rate applies to every pound of taxable UK profit.
Get the residence and permanent establishment tests wrong and you risk penalties, double taxation, or a surprise HMRC bill. Our accounting services exist to stop exactly that.
When is a company UK tax resident?
A company is UK tax resident if it’s incorporated in the UK, or if its central management and control is exercised here, even when it was formed overseas.
Those are HMRC’s two tests, and the second one catches people out. If your board meets in London and the real strategic decisions happen on UK soil, HMRC can treat your company as UK resident regardless of where it was registered.
UK residence matters because it changes what gets taxed. A UK-resident company pays corporation tax on its worldwide profits. A non-resident company pays UK corporation tax only on its UK-source profits.
Why the distinction matters for overseas founders
If you run everything from abroad, you’re likely non-resident, so only your UK activities are taxable here. But sloppy governance can blur the line.
Document where board meetings happen and where decisions are made. It’s the simplest way to keep your residence position clean if HMRC ever asks. For a related move, our guide on moving a UK company to a different country covers what shifts when management relocates.
What is a permanent establishment for corporation tax?
A permanent establishment is a fixed place of business in the UK, such as a branch, office, factory, or workshop, through which your company carries on its trade. It can also be a dependent agent who habitually does business on your behalf here.
If your non-resident company trades in the UK through a permanent establishment, the profits attributable to that establishment are subject to UK corporation tax.
The key word is attributable. Simply having a UK presence doesn’t mean all your profits are taxable here. Only the profits that genuinely relate to the UK activity fall within scope.
When a permanent establishment does not exist
Not every bit of UK activity creates a permanent establishment. HMRC treats purely preparatory or auxiliary work, like a warehouse used only for storage, as falling outside the definition.
A degree of permanence is also required. A short, one-off project usually won’t create a fixed place of business. Because this is a genuinely grey area, it’s worth reading up on trading vs non-trading for corporation tax before you assume you’re in or out.
Do non-resident companies pay tax on UK property income?
Non-resident companies that earn rental income from UK property pay UK corporation tax on those profits, and have done since 6 April 2020.
Before that date, non-resident landlord companies filed under the income tax system using form SA700. From 6 April 2020, HMRC moved them into the corporation tax regime, so they now file a CT600 return like any UK company.
This is the “non-resident landlord company” position, and it applies whether you own one flat or a portfolio.
What the property rules cover
UK corporation tax for a non-resident company can be triggered by several distinct types of UK property activity:
- UK property rental business profits, taxed through the CT600
- Gains on the direct disposal of UK land or buildings
- Gains on certain indirect disposals, such as selling shares in a company that mainly holds UK property
- Trading profits from dealing in or developing UK land, whether or not there’s a permanent establishment
One practical upside of the corporate route: unlike individual landlords capped at a basic-rate tax credit, a company can deduct 100% of its mortgage interest against rental profits on the CT600.
If you’re weighing up structure, our guide to buying property through a limited company walks through the trade-offs.
If your only UK income is property rental, you don't need a UK permanent establishment to be liable. The property itself is enough to bring you into corporation tax.
What rate of corporation tax do non-resident companies pay?
Non-resident companies pay the main rate of corporation tax, which is 25% for the financial year beginning 1 April 2026.
Here’s the part that catches overseas founders out. UK-resident companies with smaller profits can use the 19% small profits rate or marginal relief between £50,000 and £250,000. A non-resident company without a UK permanent establishment cannot. It pays the flat 25% on every pound of taxable UK profit, whatever the amount.
Company type | Rate on UK profits | Small profits rate / marginal relief? |
UK-resident, profits up to £50,000 | 19% | Yes |
UK-resident, profits £50,000 to £250,000 | Effective 19% to 25% | Yes, marginal relief |
UK-resident, profits over £250,000 | 25% | No |
Non-resident, no UK permanent establishment | 25% | No |
So a non-resident landlord company with £30,000 of UK rental profit pays 25%, not the 19% a comparable UK-resident company might expect. For the general picture, see the corporation tax rate explained in full.
How do double taxation treaties work?
Double taxation treaties stop the same profit being taxed twice, once in the UK and once in your home country. The UK has one of the widest treaty networks in the world.
In practice, a treaty usually does one of two things. It either gives one country the sole right to tax a particular type of income, or it lets both tax it but requires your home country to give credit for the UK tax you’ve already paid.
Treaties also refine the permanent establishment definition, sometimes setting clearer thresholds than UK domestic law alone.
We won’t cover country-by-country detail here, because it varies enormously and getting it wrong is costly. This is exactly the point where cross-border advice pays for itself.
What are the filing obligations for non-resident companies?
A non-resident company that becomes liable to UK corporation tax must register with HMRC within three months of becoming liable, then file and pay on the corporation tax timetable.
The clock starts on the date UK activity begins, whether that’s your first day trading through a permanent establishment, the day UK rental income starts, or the day you dispose of UK land.
Follow these steps once you’re liable:
- Register with HMRC within three months of becoming liable, using the appropriate route for your situation (property, physical establishment, or dependent agent).
- Prepare statutory accounts under UK GAAP, including a profit and loss account and balance sheet.
- File your CT600 return online using iXBRL-compatible software, within 12 months of your accounting period end.
- Pay any corporation tax due nine months and one day after your accounting period ends.
Watch the penalties
Miss the filing deadline and a £100 penalty lands the day after, even if you owe no tax. A further £100 follows if you’re still not filed three months later.
Late registration carries its own penalties too, so the safest move is to register the moment UK activity starts. If you’re setting up from overseas, our guide to registering a UK company from Europe covers the formation side, and registering for corporation tax covers the HMRC step in detail.
One more thing to note: for UK-source income that isn’t connected to a permanent establishment, such as certain interest or royalties, a non-resident company usually pays UK income tax rather than corporation tax. You can end up filing both a CT600 and an SA700 in the same year.
How Sleek helps with non-resident corporation tax
Cross-border tax is where small mistakes get expensive. Misjudge your residence position, miss the three-month registration window, or apply the wrong rate, and the penalties stack up fast.
Sleek handles the whole thing for you. We confirm whether you’re liable, register you with HMRC on time, prepare your accounts to UK GAAP, and file your CT600 correctly, so you’re never guessing about your UK exposure.
Disclaimer: The preceding information is not legal advice. This content is aimed to provide general guidance. For more formal or legal advice, contact Sleek directly.
450,000
businesses worldwide.
satisfaction rate from
16,000 surveyed clients.
FAQs on non-resident company corporation tax
Does a non-resident company always pay UK corporation tax?
No. A non-resident company pays UK corporation tax only on specific UK activities: trading through a permanent establishment, earning UK property income, or disposing of UK land or property-rich shares. If your company has no UK-source profits of these kinds, it generally has no UK corporation tax liability at all, though other UK income may fall under income tax instead.
How is UK tax residence actually decided?
HMRC uses two tests. A company is UK resident if it’s incorporated in the UK, or if its central management and control is exercised in the UK. The second test looks at where real strategic decisions are made, not where staff sit. A company formed abroad can still be UK resident if its board effectively runs it from the UK.
What corporation tax rate does a non-resident landlord company pay?
A non-resident landlord company pays the 25% main rate on its UK property profits. It can’t use the 19% small profits rate or marginal relief, because those are reserved for UK-resident trading companies. The flat 25% applies regardless of how modest the rental profit is, which often surprises overseas owners of a single UK property.
When did non-resident landlords move to corporation tax?
On 6 April 2020. Before then, non-resident companies with UK rental income filed under the income tax system using form SA700. From that date, HMRC moved them into the corporation tax regime, so they now prepare UK GAAP accounts and file a CT600 return electronically, using iXBRL-compatible software, just like a UK-resident company.
Do I need a UK office to have a permanent establishment?
Not necessarily. A permanent establishment can be a fixed place of business like a branch or office, but it can also be a dependent agent who habitually concludes business in the UK on your behalf. Purely preparatory or auxiliary activity, such as storage, doesn’t count, and a genuine degree of permanence is needed before one exists.
View more
What happens if I register late with HMRC?
You risk late registration penalties, plus late filing penalties once deadlines pass. A late CT600 triggers a £100 penalty the day after the deadline, even with no tax due, and another £100 if you’re still not filed three months later. Registering within three months of becoming liable avoids this entirely, so act as soon as UK activity begins.
Can a double taxation treaty remove my UK tax bill?
Sometimes. A treaty may give your home country sole taxing rights over certain income, or require it to credit the UK tax you’ve paid so you aren’t taxed twice. Treaties can also sharpen the permanent establishment definition. The effect depends heavily on the specific country, so cross-border advice is worth taking before you rely on treaty relief.
