Corporation Tax is payable on the profits of the UK business.
Typically for US subsidiaries sales contracts are between the US parent and the end user of the product/service. This means that for most entities they are a sales and marketing subsidiary or in other words a cost centre. The established and accepted practice for most subsidiaries is to have a cost plus/transfer pricing structure. V-Sub International PEO & Accounting can assist in all aspects of the Corporation Tax return from the return and filing with HMRC itself which is due nine months after the year end, with payment of CT within 12 months of the year end to Corporation Tax planning.
For CT purposes a cost plus entry of between 5% and 10% is standard depending on the specific industry.
There are numerous allowances for certain expenditure and disallowed costs which differ from US rules. Common differences are in the areas of customer entertaining and depreciation.
There are quite significant allowances available for R&D expenditure and numerous grant applications available depending on your industry.
