If you have arrived here it is because you are thinking about setting up a business in England but you do not know where to start. But is it complicated to set up a business in England? On the contrary, it’s easy , inexpensive and it’s legal .
In this article we will review all that you need to know before opening your business in England.
Even if opening a business in the UK is easy and inexpensive, we recommend doing the whole procedure with a specialist . Indeed, being quiet because all tax and administrative issues are in the hands of an expert, it is priceless!
That’s why we advise InterLegal consulting LLP , an experienced law firm based in London specializing in tax and accounting. If you decide to go there, be sure to mention that you come from TrucsLondres to get 5% off .
Starting a business in England Starting a business in the United Kingdom : Introduction
When one begins to think about one’s business, one realizes that opening it in France does this at a cost . You will have to pay taxes, professional dues, VAT, etc. (to which you must add management fees). In addition, it takes time and the idea that you have in mind, you will spend money that you could invest in your new project and time in paperwork and administration.
Knowing that you will have to pay taxes as soon as you start practicing, whatever your activity or how much you earn. That’s why, depending on your business, it may be more profitable to start your business in England because the speed and ease of setting up your project, combined with low tax rates make it an ideal place.
The benefits of starting a business in the UK
As we said above, you can not imagine how easy it is to start a business in the UK :
- You are free of VAT (that is, you do not pay it but you do not pay it) as long as your turnover is below £ 77,000 . There is therefore no need to apply for an intra-Community VAT number at the time of establishment. What happens once you reach the £ 77,000 threshold? Well you just have to declare it and choose to pay at the end of the year, by levy, VAT on your turnover up to 10%. This avoids paperwork and calculations.
- There is no need to declare oneself as independent , let alone pay taxes.
- All of your business creation or change actions are done online quickly and easily and cost just £ 40. No need for a notary .
- You have no tax to pay during the first 21 months after starting your business . In addition, you will only have to go to HRMC (Tax Collection Body in the UK) at the end of your first taxable year, which is 9 months after this 21-month period.
If this small list of arguments has convinced you to open your business in England, keep reading as we will now explain how to go step by step.
The steps to start a business in England
Decide which type of Business is Best for You
With the information we’ve given you, you can get an idea of what’s right for you. The most common is to move to a more profitable Limited Company .
Choose the Name of your Company
Choose well. The name must represent the company taking into account the few standards to follow, mainly that no other company has the same name. If there is no problem with the name, it will be approved quickly by the House Company
Gather the Necessary Documents to Register your Business.
There is more information you will need to provide when registering your new company :
The Address of the Company
A physical address in the UK where House Company can send all the necessary documentation. It is also the address that will appear on the profile of the company.
Detail of the Distribution of Capital and Shares within the Company
The personal information of the director of the company (who must be at least 16 years old) and, if necessary, those of the secretary.Personal information of the shareholder (s) of the company. So there must be at least one who can be the director of the company.
Prepare Memorandum and Articles of Association
These are the documents that make it possible to form society officially. The Memorandum is a short document that includes a series of standard articles in which the Shareholders confirm their desire to create the company. This document must be completed and submitted to Companie House as part of the company’s register.
The Articles of Association represent all of the company’s rules and standards, defining how the company will be run in the interests of Shareholders . It is very common for a company to adopt the private company Model Articles that covers virtually every case.
Both are done online easily.
Register with House Company
Once you have gathered all the previous information, you must send it to Companie House for approval. There are 3 different forms of mailing for which there are different prices:
- Online actions via the software : Is done through a dedicated software that costs £ 13 and has other additional tools.
- Classical online steps : via the Companie House website , you’ll have to pay £ 15 in fees.
- By mail : by sending form IN01 form by mail. It costs £ 40 and the file is processed in 5 days.
Wait for the Validation of your Company
In the case of a limited liability company, you will only be able to start your business when you receive a confirmation from Companie House , which will verify the accuracy of the information you have provided. The process is very fast and usually takes two to three hours.
Perform the first Meeting Between Shareholders
Once the approval of the Company House received, there are some formalities to complete and we recommend that you do it as soon as possible. The first is the meeting with the shareholders. It allows to appoint the director of the company.
Establish the Company’s Records (and keep them up to date)
UK legislation requires companies to establish and maintain the following registers:
- Register of Directors
- Register of Directors’ Residential Addresses
- Register of Secretaries
- Register of Members
- Register of Allotments of Shares
- Register of Share Transfers
- Register of Mortgages & Charges
- Other tasks to be done
Open a Bank Account
It is not possible to do it online and you have to go to a branch in the United Kingdom
Sign the Certificate of Distribution of the Shares
Register at HMRC , which may include Registration for Obtaining a VAT Number.
Register and Establish the PAY as you earn for Employees.
Consider the Option of Having your Name or Brand Registered
Taxation in the United Kingdom
a) Corporation Tax: 20%
b) VAT ( VAT in the United Kingdom)
General rate: 20%
Reduced rate : 5% for basic necessities and 0% for specific products such as books and children’s clothes and certain foods. Exemption: Goods and services outside the VAT system in the United Kingdom are exempt from VAT
3.c) Property taxes
A regulatory residence test is conducted to determine whether an individual is a taxpayer resident or not in British territory. This test includes a combination of physical presence and correlation factors. When an individual is resident and resident in the United Kingdom, he or she is subject to the UK Land Statement and Capital Gains Tax in addition to international income and earnings.
When he is resident but does not reside in the United Kingdom he is also subject to UK property tax on his income internationally, but may choose to cancel the capital gains tax. adding to the income as part of a transfer which is subject to an additional tax. Non-resident individuals are taxed on income and capital gains originating in the United Kingdom generated by the non-existence of residential property in the United Kingdom.
Deductions and tax credits: tax exemption can be requested for various reasons: annual turnover below the legal minimum threshold (£ 10,600 in 2015-2016), business expenses, for certain pension contributions, donations to works charity, maintenance costs of the company or for time worked on a boat outside the United Kingdom.
(d) Convention to Avoid Double Taxation
An agreement between the United Kingdom and France dated May 22, 1968 to avoid double taxation and prevent tax evasion with respect to property taxes and property taxes. This convention establishes the following rules:
Need a Hand ?
If you are planning to start a business in the UK, we encourage you to do so. You will not pay any taxes at first, you will have a lot of tax benefits and the steps are quick and easy . All that can happen to you is that the business does not work the way you want and that you have to end your business, the process being just as fast, easy and economical.
Nevertheless, we recommend you once again to get help from professionals ,. From our experience, we advise Inter Legal Consulting for their professionalism and for the following reasons:
- They have extensive experience in this area and have been helping hundreds of companies for many years to fulfill their tax obligations as efficiently as possible. They specialize in commercial law and business law and can guide you in the best way when you declare yourself as an independent in the UK.
- They are based in London and have a multicultural team with multilingual counselors.
- They help you free with registration procedures
- They allow you to be sure to respect all the obligations of the British institutions and thus assure you a tranquility without risk of fines or penalties.
- They know the law well and allow you to take advantage of all the existing tax benefits depending on the type of company you are going to
There are thousands of agencies that can offer you this kind of service in the UK, but if we recommend TTA that in our experience is the most effective accounting firm in High Wycombe we have seen so far.