4 important steps for setting up a business in the UK

The UK is an exciting location for foreign businesses looking to expand internationally, as it is full of opportunities and business potential. It is however important to be aware of the many rules, obligations and regulations that come with setting up a business in a new marketplace. This article will provide you with an overview of four things to consider when setting up a new business in the UK.

Step 1 – Type of trading entity
One of the first things you must decide when starting a business in the UK is which legal business structure to choose. Below are the main routes into the UK market, and depending on the type of business and your intentions for UK market, different setups will be suitable. In finding the best route to market for your business, it is a good idea to look at the legal differences between the structures as well as any tax or other implications. You may wish to seek specialist advice on the differences between these types of entities, the up and down sides of them, and which entity that suits your business and you intentions of the UK market.

  • Limited company (private or public)
  • Branch office
  • Partnership
  • Sole trader
  • Distributor or agent

You can register your company online, but it is important to make sure you get all the bits and pieces right, and that you are aware of any reporting and filing requirements for the business. If you are unfamiliar with UK business, Companies House and statutory filings, we strongly recommend you seek professional advice and help. Goodwille’s Corporate Legal Department deal with these issues daily, and can advice and support you when setting up the business.

Step 2 – Bank account

In order to make any transactions, you will need to open a UK bank account for your business. Opening a bank account is a lengthy process as banks are required to go through long money laundering requirements to open a corporate bank account, so ensure that you allow time and patience for this. If you have a bank account for your business in your home country, check with your bank to see if they have operations in the UK which in some cases can speed up the process, as it proves some degree of creditworthiness for the business.

If the bank account opening process proves to be longer than anticipated and you need to urgently make transactions, Goodwille can provide a client account that you can temporarily use for transactions while you wait for your account to be opened. Get in touch with our Finance Department for more information.

Step 3 – VAT or not
You may also look to register your company for value-added tax, VAT in the UK. Companies must be registered for VAT if their taxable turnover for any 12 months period is £85,000 or over. The £85,000 threshold has been agreed to remain for at least two years from 1 April 2018.

The current standard VAT rate in the UK is 20%, which is the rate most businesses will charge. Some goods and services are reduced to a 5% rate and some are exempt from VAT so make sure you know which rates that applies to your business!

Step 4 – Employment
Now that the company, bank account and VAT is sorted, you need to employ people to get the money rolling and the business moving forward. When employing people in the UK for the first time, there are several things you need to bear in mind – whether you are bringing employees from your foreign company or employing in the UK.

  • One basic thing that people may take for granted but that shouldn’t be neglected is that you need to make sure that people you employ are eligible to work in the UK. Make sure they have a UK or EU passport, or that they have a work permit/visa!
  • All workers are covered by the law of the jurisdiction in which they work, meaning that your UK employees will be subject to UK employment law. This means it’s important to make sure that your employment contracts are based on and compliant with UK employment law. The contracts should cover and set out the employee’s duties, responsibilities, rights and employment conditions.
  • You need to register your employees for PAYE (Pay-As-You-Earn, social costs of employment including income tax and National Insurance that you as an employer needs to pay to HMRC) and organise with necessary company insurances.
  • Make sure you offer your employees a pay that is at least National Minimum Wage, and that you offer sufficient benefits to their responsibilities and scope of work. There are benchmarks for salary levels and benefits depending on industry, experience etc. that can be good to use as guidelines to make sure your remuneration package is attractive and reasonable and that you don’t offer “too much” or “too little”.
  • There is a requirement to enrol your employees on a workplace pension scheme. This is called auto-enrolment and as an employer, you must automatically enrol all your employees on a pension scheme three (3) months after the start of their employment. Employees must actively opt-out of the pension scheme if they don’t wish to receive a workplace pension.

We offer HR and People Management support, and can help you sort everything employee-related – from employment contracts to benefits, pension and payroll. Get in touch with our People Management Department if you have any questions.

In summary

All these things might seem straight forward when outlined here, but the truth is – it’s not always as easy as it seems. There are rules, laws and regulations you need to be aware of and make sure you follow to avoid a hefty fine, or even worse – being taken to court.

Goodwille have 20 years of experience helping foreign businesses in the UK, and can support you with everything you need to get your business started. With a track record of helping nearly 2,000 businesses in the UK, we have all the experience and resources you need to succeed with your expansion.

Get in touch with us today if you have any questions about doing business in the UK or if you want more information on the support we can provide to your business.

HMRC announcement on EMI options

HMRC have announced that the EU State Aid approval for the EMI scheme expires on the 6th April 2018.

The UK Government has applied to the European Commission, but it is has now been made apparent that it will lapse before new approval is obtained. HMRC considers that the State Aid approval applies to the granting of share options and therefore that share options granted up to and including 6 April 2018 won’t be affected by this lapse in approval. HMRC will, up until the 6th April 2018, continue to apply its current guidance & practice in relation to employment-related securities options validly granted as EMI share options.

Therefore:

  1. EMI share options granted between the period of the 7th April through until the new EU State Aid approval may not be eligible for the previous tax advantages.
  2. Organisations may wish to consider delaying the grant of EMI options until the EU State Aid approval is obtained.

For more information on how this may impact your existing EMI scheme do not hesitate to contact our Corporate Legal department.

We’re recruiting – Corporate Legal Controller

THIS VACANCY IS NOW FILLED. CHECK OUT OUR CURRENT VACANCIES HERE.

Goodwille is a forward-thinking, ambitious company dedicated to providing foreign businesses with the professional services required to establish themselves and flourish in the UK. These include Corporate Legal, Finance, People Management, Payroll & Virtual Offices.

We are currently looking for an experienced Corporate Legal Controller, preferably fluent in a Nordic language, to join our Corporate Legal team in London and provide company secretarial and legal advice and services to a range of international and UK clients. While you will primarily work with the Corporate Legal team, all our departments are integrated and you will also find yourself liaising with other departments, such as HR, Finance and Payroll departments on a regular basis, and attending frequent team, company and client meetings.

You will be responsible for
• a portfolio of existing and new clients; being the main point of contact for and managing the corporate legal services for these
• managing and supporting existing client accounts, including maintaining statutory records and registers, taking board minutes, striking off/liquidation etc.
• managing new client accounts, including company incorporation, VAT registration, opening bank accounts, insurances, data protection, health and safety etc.
• ensuring timely filings to Companies House, HMRC and other agencies
• reviewing statutory books as part of company health checks and annual statutory audit
• special client projects

We believe that applicants have good knowledge and experience of company secretarial work, and preferably experience working in an international environment and/or handling employees and operations in different countries.

In joining us, you will become part of a modern, forward-thinking and inclusive organisation, capable of offering a stimulating environment working with a diverse range of client companies and corporate legal issues.

This is your chance to join #TeamGoodwille – check us out on Instagram. When you join Goodwille you get access to a whole range of employee benefits, all designed to ensure an enjoyable work/life balance. Some benefits for all employees include:

  • Office fruit every week
  • Employee perks, rewards & benefits including discounts on supermarkets (Sainsbury’s, Tesco etc.) high street stores (Topshop, John Lewis etc.) & gyms
  • Complimentary phone insurance, as we know how important it is to stay connected
  • Access to the well-being & lifestyle platform, including eating advice, exercise routines and yoga videos
  • Generous social budget for team lunches, parties and for you to hang out with colleagues.

Job type: Permanent, full time
Location: Kensington, West London
Salary: Depending on experience/skill set

If you like the sound of this vacancy and all the features and benefits you get by being part of a team like Goodwille, then please contact vidou.motee@goodwille.com.
www.goodwille.com

Freedom of Establishment – Corporate Mobility

Often labelled as “passporting”, Corporate Mobility means that once a company is established in one EU member state, others will need to recognise it as validly established legal entity. As a result, an established company can sell goods or services to other EU countries, in principle without needing to establish a branch or subsidiary there.  In some instances, member states’ tax rules will still require establishment of a local entity. An example here is the UK legal obligation to form a “UK establishment” (subsidiary or branch) when certain criteria are met. Several questions come to mind in relation to the future of this freedom…

Will you need to establish an entity in the UK to run operations smoothly?
If you have a UK Branch, should you form a subsidiary to strengthen your UK base?

Answers to these questions will vary depending on where your company is based, as well as what Brexit scenario the future holds – will there be a “hard Brexit” or not, how long is the transition period, will Mrs May negotiate a solution for corporate mobility?

To illustrate the background: Most continental EU jurisdictions (e.g. France, Germany) adopt the “Real Seat Theory”. This means the company will follow the company law where it has its real seat, being the location of the company’s centre of management or central administration. The second theory, called “Legal Seat Doctrine” (adopted, for example, in England), the applicable company law is determined by the jurisdiction where the company is incorporated.

This means that a UK established company, whether or not it is a foreign subsidiary or not, will retain its legal status in the UK irrespective of the Brexit model applied. Depending on business carried out in other EU member states, your UK established company may need to explore whether you should set up an entity in another EU country if you do not currently have such an entity. This will be particularly relevant for companies registered in one of the UK jurisdictions but having their central administration in a “Real Seat Country”.  Those types of businesses may risk to be regarded as unincorporated associations following Brexit, thus potentially losing their status as legal entity in those other member states.

On the flip side, if you are currently operating an entity outside the UK and are carrying out regular business with the UK, you may not have the benefit of being regarded as legal entity in the UK. Depending on your exposure to the UK market and business plans, you may wish to consider setting up a UK Limited company to strengthen your base. Whilst it is not possible to advice on what precisely will happen, we have seen this used as a contingency approach during less certain times.

Watch this space for a detailed analysis on any indications we have seen so far on how the UK is looking to fare with your Corporate Mobility!

 

 

If you have any questions about Corporate Mobility,
get in touch with Tessa Schrempf,
Corporate Legal Controller at Goodwille.
tessa.schrempf@goodwille.com


This update is for general guidance only. Specific legal advice should be obtained in all cases. This material is the copyright of Goodwille Limited (unless otherwise stipulated) and is not to be reproduced in whole or in part without prior written consent.

Free Movement of Goods

The free movement of goods is one of the cornerstones of EU law and business. It essentially is a two-sided coin, and provides for tariff‑free access to the single market and the elimination of non‑tariff barriers such as product regulation and approvals.

The issue concerning the status of UK rules vis-à-vis laws pertaining to the movement of goods and services, as well as changes to the VAT system, increasingly captivates our interest day by day. As the UK hopes to achieve a bespoke agreement, the British government will seek to maintain the closest relationship with the EU and, as UK Prime Minister Theresa May was heard saying during her Florence speech, a frictionless trade agreement between the bloc and the UK. The Draft Withdrawal Agreement published on 19th March 2018 supports this approach. One of the clauses both parties have agreed on stipulates that any good that was lawfully placed on the EU or UK market before 31st December 2020 should be able to continue to circulate freely until reaching the end-user. The existing rules on free movement of goods will largely remain in force during the Transition Period, with some applicable exceptions.

These developments are at least an interim departure from Mrs May’s ruling out of remaining in the single market or customs union. It remains to be seen how the post-Transition Period deals with the matter of freedom of goods, but future developments do not necessarily threaten frictionless EU-UK trade. UK industries and their respective sectors are highly integrated with the single market; the Office of National Statistics (ONS) state that over 59% of UK imports are of EU origin, whilst 48% of UK exports end up within the community.

It would not be in Britain’s interest to lose free-trade access to the EU, as the UK would lose access to countries with which the EU and European Economic Area (EEA) have also been negotiating free trade agreements. Moreover, a weakened Pound Sterling at the outset of the June 2016 Referendum, has seen demand for UK-built goods abroad increase, as exports became cheaper, and tourism saw improvement, where visiting the UK became more affordable. There is scope to protect frictionless trade in goods and services and to secure proper VAT processes following Brexit.

VAT and the flow of goods and services are symbiotic, and they will adhere too much of PM May’s rhetoric concerning the maintenance of seamless trade with the EU – predictability. Voices that declare that Brexit means “taking back control” are purported, as past decisions made by the European Court of Justice will be influential in the continued interpretation of VAT law in British law. The EU VAT Directive have been soaked up by British courts, and this is another signal that the path Britain is taking concerning goods, services and VAT will be governed by the virtues our company seeks to aspire to: predictability and reliability.

Additionally, issues concerning the future of services or goods do not seem to be so challenging at this stage, many self-accounting rules for VAT on services bought from the EU will remain broadly unchanged and there could be further opportunities; especially if one considers that EC Sales List declarations may not need to be completed. This suggests an orderly process of transposition and transition in a post-EU UK as being the name of the game.

In areas concerning the exchange and freedom of movement concerning technologies, the UK seeks to maintain its position as a leading provider and market for hi-tech industries. Upon reading the UK’s Industrial Strategy Paper in November, the UK seeks to increase innovation by raising total research and development investment to 2.4% of GDP by 2027. Over £1 Billion will be invested to boost Britain’s digital infrastructure, £176million for 5G and £200million invested to foster full-fibre networks in the UK. Equally important is the UK’s drive to invest £20 billion into innovative and high potential businesses.

 

 

If you have any questions about Free Movement of Goods,
get in touch with Alexander Goodwille,
CEO at Goodwille. 

alexander.goodwille@goodwille.com

 


This update is for general guidance only. Specific legal advice should be obtained in all cases. This material is the copyright of Goodwille Limited (unless otherwise stipulated) and is not to be reproduced in whole or in part without prior written consent.

Our guide to become GDPR compliant

As advisors supporting businesses in the UK, we would like to inform you of the new Data Protection legislation, the EU General Data Protection Regulation (GDPR), and its related implications for your business. We want to ensure that you are aware of the new legislation, what measures your company have to take in order to comply with the regulation, and how Goodwille can assist you in becoming GDPR compliant. This guide provides an overview of the new regulation, and what you can do to ensure you and your business are prepared for the changes to existing legislation.

The GDPR is enforced on 25 May 2018, replacing the existing EU Data Protection Directive. The regulation significantly increases the obligations and responsibilities for businesses in how they gather, use and protect personal data. At the same time it strengthens European citizens’ data privacy and right to access their personal data by setting out additional and more clearly defined rights for individuals whose personal data is stored by businesses.

Below are some of the main considerations on how to prepare to become a GDPR compliant organisation:

Identify problem areas in your business by reviewing and enhancing your organisation’s risk processes

This can be done by making an inventory of all personal data the business holds, why the business holds it, if it is still needed, and if the data is safely stored.

Communicate with your clients and employees

You will need to ensure that your clients and employees are fully informed about how their data is used and that your company has procedures in place cover all the rights individuals are entitled to, e.g. the right to access their data or have it erased from your systems.

Data subject access request

Every individual has the right to make a data subject access request. This means that the individual has the right to obtain all the personal information your company stores about the individual within one month from the date the request was made. You will need to ensure that you have measures in place to deal with any such request within one month’s time.

Consent to store individuals’ data

An individual’s expressed consent has to be freely given for a company to be allowed to gather and store any personal data. Note that an individual cannot be forced into consent or be unaware that they are consenting to their data being stored e.g. through pre-ticked boxes, but the consent has to be actively given by the individual.

It is essential that your business is mindful of data privacy in all ongoing and future projects, as you will face heavy fines if not. The GDPR is based on the one stop shop mechanism signifying that organisations engaged in cross-border processing of personal data will deal with a single lead supervisory authority. Your company’s lead supervisory authority will be the authority of the country in which your business has its main establishment.

To ensure that your business is compliant before 25 May, it’s time to put a GDPR policy in place or draft board minutes to show that your company is working towards becoming GDPR compliant. Goodwille are happy to provide you with further guidance on the GDPR, help set up a company policy or draft board minutes containing information on how your company is working towards complying with the regulation. Get in touch with our Corporate Legal team today for assistance or if you have any questions. This article also provides a good foundation for understanding the GDPR and its implications for your business.

 

GDPR and your business

Any business looking to set up a subsidiary in the UK, or anywhere in the EU, will have to have at least a basic understanding of the General Data Protection Regulation (or GDPR). The Regulation is the biggest shake-up of individual rights to their personal data of the Internet age and will have a major impact on how data is stored and shared within and without the EU.

What has changed?

From May 25 2018, the regulations change to unite all local privacy laws across the EU – changing the definition of what constitutes personal information to include names, photos, email addresses, and even a computer’s IP address. This applies across a person’s whole life, there is no distinction between a personal email and a work email, for example.

The new rules also introduce new rights for consumers, including the right to be forgotten, the right to know what data is held, the right to object to receiving marketing and the right to have information about them corrected. This means that explicit consent must be received from the consumer for each use of their data before it happens, meaning separate consents are needed for different activities.

What does it mean for my business?

It is vital that businesses comply with the new regulations, with tough penalties in place for non-compliance, up to a 4% fine of global revenue. This applies even to non-EU companies who hold the data of EU citizens, or EU companies who process data outside the Union. While it is a good idea to appoint someone to oversee the transition to the GDPR rules and ensure compliance, it is more than just an IT issue. Sales and Marketing are two of the areas most directly affected.

The most important measures to take are to ensure that you have procedures for properly obtaining the right consents from customers, a policy on what data is kept, where and why, storing the data securely, ensuring that old data is deleted and ensuring there is a procedure for deleting or amending data when requested.

While most of these needs are just good housekeeping anyway, they will soon be enforceable by law. It is very important that all businesses not only understand what GDPR means, but that they also have a plan to transition. Our team of legal experts can help you with guidance and answer any questions you may have about GDPR and how it can affect your business. Get in touch with us today!

Do you need insurance for your UK office opening social event?

Do you need insurance for your UK office opening social event?

Many small UK businesses host informal parties for their staff and clients during the festive season and to celebrate special promotions and events during the year. However, did you know that your new business premises in the United Kingdom may not be covered for such events under your existing business insurance?

Your liability if you serve alcohol to your visitors or employees

If you decide to serve alcohol in your office, you could be held liable for any booze-related incidents. In fact, in the UK you could find yourself on the wrong end of a law suit if any of the following incidents are deemed to have occurred because those involved had consumed alcohol at your party:

• damage to property
• bodily harm
• sexual assault or harassment
• underage alcohol consumption
• drink-driving related accidents

How can alcohol liability insurance protect your business?

Even if the extent of your alcohol serving merely entails a bottle of mulled wine and a few beers in the office after work on Christmas Eve, you must have a Liquor Liability Insurance policy in place.

Your policy will cover any claims made by guests who were injured or who had items of property damaged by other attendees who were intoxicated. This cover also includes legal fees and covers any damages that may be sought and awarded. Although your standard business insurance policy won’t cover alcohol-related incidents, you can generally have it updated to include Liquor Liability Insurance as an additional endorsement.

Another method of getting Liquor Liability cover is to take out a stand-alone special event insurance policy. This may work out slightly more expensive than an endorsement to your existing UK business insurance policy, so have a chat with a good financial adviser to explore both options so that you secure the best deal for your circumstances.

It’s worth noting that, even if you only serve someone one drink at your office bash, you could still be liable for incidents that occur if they go on to paint the town red subsequently. Liquor Liability Insurance will cover you for such eventualities.

In conclusion

If you’re planning on serving your staff or clients with alcohol at an informal social event on your new UK business premises, you must consider taking out Liquor Liability Insurance cover. The extra premium will be a small price to pay for your peace of mind.

For more advice on local law when setting up a UK office, contact the team at Goodwille.

4 Things to Consider When Starting Up Your Own Business

For many people, starting a business is a lifelong ambition, but while it comes with many perks, there are a number of challenges that business owners will face. If you are interested in starting up your own business, there are many factors to be aware of so that you can prepare yourself for the pitfalls along the way.

Here are four things to take into account when starting up your own business.

1. You need to have enough money

Before you take the extraordinary leap of faith, you need to be able to make sure you have enough money saved up in order to tide yourself over. Starting and running a business does not mean that you will be raking in a lot of money. Businesses have to start somewhere and they tend to start slowly – success will not come overnight.

Save up enough so that you can fund financial commitments (e.g. rent, bills, mortgage, car payments, etc.) It is often recommended that aspiring entrepreneurs should save up around a year’s worth of income. Try to start your business while working in your job rather than quitting to start the business. Also, see if you can make sacrifices in other areas to save on costs (i.e. house sharing, trading in your latest car for a cheaper model, food shopping on a budget etc.).

2. You need to be passionate, dedicated and committed

There is absolutely no point in starting a business if you are not prepared to put the work in. As previously mentioned, business success will not happen overnight. Be patient and be prepared to put the effort and graft in because it will take time to build up your business (estimated time: between five and ten years).

3. You need to have a thick skin

The reality is that not everyone will see your vision. Unfortunately, some people may judge and criticise you for starting a business. You need to be confident and assertive in your ambition, and prevent the naysayers from stopping you from achieving your dream.

4. Think: is your business worthwhile?

You need to think about the position of your business in the market sector. What can your business bring to the table, so to speak? Who are your competitors? What makes your business stand out? What problems do potential clients have and what solutions can your business provide?

By taking these important factors into consideration when starting up your own business, you can be sure to be prepared for the challenges along the journey to success. At Goodwille we have seen many a businesses grow and flourish, and can help you make sure you have all you need to succeed with your business ideas. Contact us today – we’re here to help!

3 essential business elements you should consider outsourcing

When you’re running your own business the learning curve is astonishingly steep, the outlays immense, and your To-Do list endless. It can be overwhelming, intimidating, and incredibly stressful. It can also be extremely rewarding, fulfilling, and lucrative. The trick to getting it right is knowing how best to spend your time and resources. You must balance the requirements of your budget against the practical and logistical needs of your business. It’s tough making those calls, and a rookie mistake that almost all business owners make is believing they can save money by doing as much as possible themselves.

The reality, however, is that there is a finite amount of time you can spend working. Even if you work every waking hour of the day, you will hit a point where you just can’t do any more. Outsourcing is the solution to this, but it’s often a tough bullet to bite.

Many entrepreneurs cringe at the idea of paying someone to do things they could do themselves, but here’s the truth: a professional can do it far better than you can, in far less time, and the amount you will pay them to do a brilliant job is less than the amount you will earn by dedicating that time to what you really do best.

Here are three essential business elements that you should consider outsourcing.

#1 Bookkeeping

Getting your accounts and bookkeeping right is absolutely vital. It’s also very tricky, time-consuming, and stressful. Why not hand it all over to an expert who will ensure your books are in perfect order, and you always know exactly where you stand financially?

#2 Virtual Office

When there are so many things on your To-Do list and you are juggling a multitude of tasks and responsibilities, the telephone can easily become the bane of your existence. It’s constantly ringing, interrupting your train of thought, distracting you from vital tasks, and tying you up in lengthy conversations that you really needed to put off for a few days. You dream of a receptionist, but it’s not in your budget, and you don’t have space for another desk, anyway.

A virtual office is a solution. Not only will all your phone calls be taken care of by a professional, freeing you up to do more important things than answering the phone, but you will be armed with the knowledge of exactly who called, when, and why. This eliminates the possibility of missing phone calls and forgetting to call people back. It also enables you to dodge calls you’re not ready for, and deal with all those conversations in your own time. A virtual office also has the major benefit of providing you with a trading address, which is particularly handy if you work from home and don’t want to give your home address out to everyone and his wife!

#3 Tax Returns

Self-assessment is one of the most stressful elements of running any business. It’s a migraine-inducing nightmare, and if you get it wrong, or don’t get it done on time, it can also be very costly financially. Outsourcing your VAT work guarantees everything is handled in a professional, timely fashion, and there are no expensive mistakes!

If you’re considering outsourcing for your business, contact Goodwille today. We can provide more information about our services and discuss how outsourcing will benefit you directly.