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Starting a business in the UK can be complex, especially if you’re from outside of the European Union. You need to consider the different types of company structures, tax, administration, and whether you need a visa. In this post, we look at the key things you need to know when setting up a business in the UK: part 1.

Know the market

In the UK, there are around six million private sector businesses, according to official government data, and this figure is growing. Since 2000, the number of businesses in the UK has increased by 2.4 million.

Three-quarters of UK businesses don’t have any employees, meaning they’re owned by self-employed sole-traders or partnerships. Around five million UK residents are registered as self-employed, amounting to 15% of the overall workforce.

Data from the Office for National Statistics show the most common sectors for self-employed workers are as follows: construction (920,000), scientific or technical activities (643,000), vehicle sales or repairs (396,000), administration and support services (361,000), and health and social work (349,000).

At the time of writing this post, anyone from within the EU, with the exception of residents from Bulgaria and Romania, can set up a business in the UK without special permission.  However, as the terms of Brexit are currently being negotiated, this is likely to change in the immediate future.  If you’re from a country outside of the EU or EEA, you may need a visa.

How to Obtain a UK Visa

There are several different types of visa those looking to break into the UK market may require:

Innovator visa

To obtain an innovator visa, you must have at least £50,000 in investment capital or have invested this sum already in the previous year. If you haven’t invested the money yourself, it must come from a government-endorsed funding competition, a venture capital fund registered with the Financial Conduct Authority, or a UK government department.

You must also adhere to some other rules too, such as demonstrating you are from a majority English-speaking country or have taken an accredited English language examination.

Visas cost £1,021 and last for three years. You can extend your visa by a further three years if you meet the criteria.

Start-up visa

You can apply for a start-up visa if you have an endorsement from a UK higher education institution or an organization with a history of supporting UK entrepreneurs. You’ll need to prove your business idea is new, innovative, and with potential for growth. Fees range from £308 to £363.

You can stay in the UK for two years with a start-up visa. You can’t extend a start-up visa, but they can switch to an entrepreneur visa upon expiry in some circumstances.

About us

At UK Advisory Services, we specialise in helping overseas businesses and ambitious entrepreneurs across the globe helping to set up and establish a presence in the UK. Our advisors have decades of experience in helping businesses set up in the UK, specialising in end-to-end market entry.

We hope that you’ve found this post on ‘The key things you need to know when setting up a business in the UK: Part One’ useful.  If you have any questions or if you’re looking to set up business in the UK get in touch today to see how we can help you.

2020 has been quite the year, especially for business owners, with the COVID-19 pandemic being the make or break of many businesses.  Now, as we approach 2021, it’s time to consider the lessons we’ve learned during this turbulent year and to also think of the learnings that we will take forward.  In this post, we look at how to sell in the ‘new normal’.

Doing business in 2021: How to sell in the ‘new normal’

As we enter 2021, having a clear purpose, an adaptive sales strategy, effective sales processes, and proactive, agile sales teams are key. Businesses need to monitor and quickly adapt to the changes in market dynamics, with the ability to adapt to ever-changing conditions.  Agility and adaptability are imperative to success.

Show that you’re human

Let your clients know that you too understand their fears and their hardship. Show them that you care. Show empathy towards those affected by Covid-19, and show how your company is helping your customers, employees, and other stakeholders. Social media is the perfect place to shout about this. 

Stress that despite the difficulties you have faced this year, your business will continue to provide your customers with the services/products that they are accustomed to.  Assure your client base you will continue to offer a quality service no matter what.

Be Innovative

We’ve all faced challenges we could have never predicted this year.  Think about what this has meant to your customers- what unforeseen problems have they had to try to overcome? Can you provide a product or service that provides a solution to these hurdles?  

Be clear and manage expectations

Be clear with your customer base.  Lay their options our clearly. Provide them with fresh options for new situations, and allow them time to process the information.  Clarity can also be achieved by comparing and contrasting available options. Instead of just presenting your product or service in isolation. Show the options and compare the benefits, also include time and cost savings. The key to success is to ensure you are taking ownership of the situation, as much as possible. Don’t allow the situation to take ownership of you and your potential customers.

About us

At UK Advisory Services, we specialise in helping overseas businesses and ambitious entrepreneurs across the globe helping to set up and establish a presence in the UK. Our advisors have decades of experience in helping businesses set up in the UK, specialising in end-to-end market entry.

We hope that you’ve found this post on how to sell in the ‘new normal’ useful.  If you have any questions or if you’re looking to set up business in the UK get in touch today to see how we can help you.  

As a UK tax resident, the default position is that you are subject to tax on your worldwide income and gains. This can range from employment, self-employed, dividends, interest, rental, unit trust and all other incomes as well as gains from the sale of shares or assets, wherever in the world.

Although you may pay tax overseas on your foreign income, this income may still be subject to tax in the UK and potentially taxed twice. There may be scope to relieve part or all of the overseas tax paid dependent on the amount of tax payable and whether there a tax treaties in place.

Only pay tax on foreign income if you’ve brought it into the UK?

Where the UK tax system can get further complicated is if you are non-UK domiciled and have foreign income. You may have a choice to be taxed on the remittance basis (RB) instead of the arising basis. This would essentially mean you are only subject to tax on the basis you bring (remit) those funds to the UK.

ADVANTAGES

• Only pay tax on foreign income when remitted to the UK
• If foreign income is less than £2,000, ability to use RB without making an election and can still be entitled to personal allowance and capital gains allowance
• Potentially avoid double taxation

DISADVANTAGES

• Loss of personal allowance and capital gains exemption allowance
• Potential Remittance Basis Charge of at least £30,000 if resident in the UK for at least 7 of prior 9 years
• Harsher tax rules if remitting overseas funds from a mixed fund account

If you claim the remittance basis of taxation then it is vital to ensure your offshore bank and financial accounts are set up in a manner to ensure you do not have any “mixed fund” accounts. Should you wish to make a remittance to the UK from a “mixed fund” account, this can have harsh tax consequences unlike segregated accounts.

What counts as a remittance?

A remittance is any foreign income or gains that you bring directly or indirectly into the UK so that you or a relevant person can enjoy the benefit of such income or gains in the UK. The following are some examples of potential remittances:

• If you receive a service in the UK and pay for that service using
  foreign income or gains
• If you buy an asset in the UK and use foreign income or gains to
  pay for it
• If you purchase an asset outside of the UK using foreign income
  or gains then bring that asset to the UK e.g. a car or luxury goods
• If you create a debt in the UK and then pay off that debt using
  foreign income or gains e.g. a mortgage, use of a credit card in
  the UK.

Planning to move to the UK

If you are planning to move to the UK and you have non-UK capital, income or gains which shall continue to generate income outside the UK, it would be advisable to have a consultation prior to moving to the UK.

This is because you are regarded as UK tax resident based on a set number of tests which are based on the number of days you spend in the UK and your reason for moving. Once you become tax resident, you are automatically subject to tax on your worldwide income unless you make a claim for the remittance basis and there may be no time to segregate your accounts.

In your year of arrival, your tax year may be split into two parts where you are treated as non-UK resident for part of the tax year, hence only subject to tax on your UK income for that non-UK resident period.

Hence prior to moving, you should consider the number of days you will spend in the UK and when you wish to become UK tax resident from. You may also wish to consider whether bank accounts are segregated so that you are confident in terms of what is being remitted to the UK e.g. by setting up a clean capital account, a capital gains account and an income account. This can prevent the complicated tax compliance and additional taxes which can unravel from a mixed-fund account remittances.

Domicile

Your country of domicile will usually be the country of your permanent home or where you may consider your ‘roots’ are. This is different to residence, nationality and, citizenship. There can be three types of domicile: domicile of origin, domicile of choice, domicile of dependence and you can only have one domicile at a time.

Since 6 April 2017, if you have been resident in the UK for at least 15 of the 20 previous tax years, you will be deemed UK domiciled.

If you would like to know more, please get in touch and let our experts help.

+44 (0) 20 8861 7575
be-ambitious@lawrencegrant.co.uk
www.lawrencegrant.co.uk

When setting up a new business in the UK it is important to ensure you have essential business contracts in place. If you launch your idea in haste and without professional guidance, you may end up without adequate protection for you and your business.

Whatever your business plan is, you must ensure that you have put in place the right protection, that is tailor-made for your venture. In this article, we briefly explain the agreements you need to have on your radar before you start trading.

1. Shareholders Agreement (SHA)

SHA is a document which sets out the relationship of the stakeholders of the company including their rights and duties (if there is more than one shareholder) and it regulates the transfer of shares, provides protection to minority shareholders and majority shareholders. A well-drafted SHA not only documents the understanding between the shareholders on important matters relating to the company but also provides shareholders with better protection and the ability to direct the future of the venture if the relationships breakdown or certain scenarios occur such as retirement or death.

2. Terms and Conditions

Getting your products or services ready for the market may be your top priority when setting up your business. However, there is something else that you must take into account at the very beginning. It is vital to establish the basis on which you will supply your products or services through your Terms and Conditions. It does not matter if your business provides products or services, Terms and Conditions are essential.

The Terms and Conditions set out the rules and guidelines that your clients and your customers must know and accept when they purchase products or engage your services. The Terms and Conditions also helps to protect your business and limit your liability. The elements to be incorporated in the Terms and Conditions include the specifications for products or services provided, payment terms, timeline, the extent of your liability and many other important matters. If you do not have appropriate Terms and Conditions in place your company is at risk of uncertainty and misunderstandings. Terms and Conditions are best drafted specifically to suit your circumstances.

3. Non-Disclosure Agreement (NDA)

As a business, there will be numerous instances when you will be required to disclose confidential data to third parties. You may explore a deal with a third-party in order to get them interested in your company as an investor, have a working relationship or any other arrangement that may require you to share confidential information. This is why an NDA is crucial to prevent the third-parties to use your confidential data without your consent. An NDA allows you to clearly and strictly define what shall be deemed as “confidential information” (for example, your business ideas and trade secrets) and how the receiving party can use your confidential data. Failure to have a well-drafted NDA may result in unintended loss of confidential information without having the right to claim for financial damages and related costs from the receiving party.

4. Employee Contracts

At some point, whether it is at the incorporation of the business or a later stage, your company will require one or more employees to support and expand the business. You must have a well-drafted Employment Contract in place. There are specific areas which must be covered in any Employment Contract to protect the business. The Employment Contract will create a strong basis for setting out the rights and duties of each party towards the other. We always work closely with our Employment, HR and Immigration Partner, Davenport Solicitors, in this area.

5. Contractor/Supplier Agreement

In the course of fulfilling the business needs of your company and providing products and services to the customers, your company will engage with third-parties. It is very often that the third-parties are the suppliers to the business whether it is an individual or a company. In order to have a good working relationship and protect your business, you must consider having a standard form of Contractor/Supplier Agreement in place before entering into any transaction with third-parties. This Agreement will provide main principles of how you want your suppliers to deal with you when they supply products or services to the company.

Unfortunately, many businesses realise the importance of these essential contracts only when something goes wrong and the damage to the company has already occurred. To avoid that costly mistake from the very beginning, we are able to provide you with guidance by advising and drafting key contracts you will need for your company or guide you on standard contracts you are requested to sign.

This article was written by UK Advisory Services partner Bowling & Co. Solicitors. For further information please contact us.

The material contained on this website contains general information only and does not constitute legal or other professional advice and should not be relied upon as such. While every care has been taken in the preparation of the information on this site, readers are advised to seek specific advice in relation to any decision or course of action.