Despite a challenging 12-months around the world, as a firm we have grown. The number of inbound start-ups has increased and our clients have actively grown. There is clear evidence that the amount of new entrepreneurial ideas continue to flow.
We look at the core factors to expand your business to the UK. Our clients, by their size of typically starting with a new company, and no employees, are classified as a start-up. However, in their home jurisdiction, they are usually well established and, in some instances, recognisable names.
1. Research, research, RESEARCH!
Invariably when we are approached by potential clients they have either already got customers in the UK or they are reasonably confident that there is a customer base in existence and there is a market for them in the UK. Where possible, we advise to talk to other companies that have set up in the UK, as expanding into any international market is not the same as doing business in the home jurisdiction. We believe this should be approached with an ‘eyes wide open’ stance.
2. Infrastructure – is an entity needed?
Not necessarily but depending on the proposed business activities and trading model it is more often than not that you will need either a subsidiary or a branch. If the overseas company is an owner-managed business, then the UK company could be owned by the shareholder outright and not as a subsidiary. This may be based on home jurisdiction tax reasons for example.
3. VAT, what are the regulations and how do I become Registered?
Depending on what the business is going to be selling with a product or digital service for example then you may well need to become VAT registered. It is important to be aware of the £85,000 VAT registration threshold but it may also make sense to register for VAT from the date that the company was set up. Backdated registration is possible and VAT registration can usually be applied for shortly after the company has been registered with Companies House. We explore what is required to become VAT registered in a previous blog post.
4. Employing someone in the UK
If you’re taking on employing personal in the UK, as the employer you need to ensure that you have completed the right to work checks on the employee and that you have furnished them with a contract appointment prior to the start date. You must also select the payroll cycle in the middle or at the end of the month as is typical in the UK, and also select the pension contribution basis. Under the automatic enrolment pension regulations, a pension scheme is mandatory for those employees earning over a certain amount. As part of our payroll setup process, we guide you through and register the pension scheme on your behalf.
5. What about the books?
From an accounting perspective, we advise keeping things simple where ever possible. Using a product like Xero, a cloud-based accounting platform streamlined process and allows all interested parties whether in the UK or home territory based to keep abreast of the books. We offer a service of bookkeeping and payroll combined and some of our clients prefer to do bank reconciliation and we handle the sales invoicing and purchase side of the books.