The British economy is the fifth largest economy of the OECD countries. The main reasons for this are the low inflation, low interest rates and the relatively low level of unemployment. Exports and imports have gained importance in recent years. And the number of foreign investments has increased.
Services account for 73.7% of British GDP. The services sector is crucial here: 74% of the nation’s workforce depends on it. Industry is declining in importance, but 25% of the population still work in this sector. The main industries are the steel industry, shipbuilding and ship repairs, the aviation industry, the chemical industry, the food industry, the clothing industry and the paper industry. Agriculture makes up a relatively small part of the economy. Primary energy production accounts for 10% of total GDP.
Principal sectors
The medical sector is a very promising niche industry. Health care needs are bound to rise over the coming years because of the ageing population. The building sector is buoyant at present and growth, too, is predicted in the housing sector. Primary energy production accounts for 10% of total GDP and the large coal, natural gas and oil reserves hold considerable promise for the future.
Tax bands
Currently, the British basic rate of corporate income tax for annual profits between 50,001 pounds and 300,000 pounds is 19%. For incomes between 300,001 and 1,5 million pounds, there is a sliding tax rate between 19% and 30%. Profits in excess of 1.5 million pounds get taxed at 30%.
The current standard VAT rate in the UK is 17.5% and applies to most goods. Some products and services, e.g. domestic power, have a reduced tax rate of only 5%.
The main British business institutions:
