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.

Free Movement of People – Individual Mobility

By law, this freedom is called “Freedom of Workers”. We have expanded the notion here as in practice, it relates to more than just EU workers and includes for example family members and jobseekers, but also students and unemployed Union citizens. We have picked out the three most relevant categories here below.

Brexit for Employees

There has been a lot of speculation over the past 2 years around Brexit which has perhaps meant that many non-British citizens are questioning the security of their current situation in the UK. The key information is that there will be no change to the legal rights of EU nationals living in the UK until at least 31st December 2020, or later if there is an extension.

In December 2017, the UK Government announced that an agreement had been reached with the European Commission on citizens’ rights, whereby EU citizens who arrive in the UK by 29 March 2019 will be entitled to apply for “settled status” (see below) when they have five years’ continuous residence in the UK. However, the Draft Withdrawal Agreement published on 19th March 2019 confirmed that free movement of people will be extended to the start of 2021. This recent assurance means that EU Nationals arriving in the UK would be able to stay in the UK indefinitely and also access work permits via the new immigration regime.

Did you know…

  • Currently, citizens of EEA countries and Switzerland plus any non EEA family members can live and work in the UK and do not need any specific permission to do so at present, however in the interests of security and perhaps reassurance, it could be beneficial to formally request documentation.
  • There are pro’s and cons regarding applying for Permanent Residency at this time and also criteria as to whether an individual has this option open to them, i.e. one stipulation is that an individual must have been a continuous resident in the UK for 5 years or more.
  • Currently anyone who is an EU citizen living and working in the UK does not have to make an application to preserve their rights at this time; and indeed the Home Office are encouraging EU citizens to not make applications just now as they are inundated with applications.
  • There will however be the need to demonstrate via documentation in the future that an individual has the right to live and work in the UK. This could be via Permanent Residency, British Citizenship or Visa, but the longer term plan would be that individuals who do not hold visa status will apply for Settled Worker status (which will be discussed later in the newsletter). Those currently holding Permanent Residency will also need to apply for Settled Worker status.
  • Key areas which individuals may want to consider are whether they wish to be British (British Citizenship or Settled Worker), whether they would like the right to vote in the UK, whether holding dual citizenship is a possibility, whether they have EU family members who they would like to bring with them to live in the UK (as the British Immigration rules may be more restrictive than those currently enforced under the EU) and their taxation status.

Brexit for Employers

As discussed above, immediate uncertainties over the immigration status post-Brexit were addressed in the Draft Withdrawal Agreement confirming EU citizens’ rights to remain unchanged until 31st December 2020. As previously, this means for the moment there is no issue for EU nationals to live and work in the UK. Irrespective of the recent assurances, employers need to think about future proofing their business, which of course means looking at how the company can support both current non British employees and also potential hires from outside the UK.

Some thoughts to bear in mind:

  • Consider the workforce and how many non-British employees are in the business or British employees who may have non-British spouses.
  • What can your business afford by way of assistance? Consider presentations explaining the current status re immigration and Brexit and also presentations to assist with applications. Perhaps you can afford to pay for some legal support for employees who may be affected?
  • When you are hiring non-British employees, consider that they may wish to have some reassurance from you that post Brexit, should they not be in a position to stay and work in the UK that they will have some support, this could be by way of a clause in a contract, legal assistance, relocation package etc.
  • There is an expectation that there will still be a high requirement for EU talent in the UK post Brexit. There is a continuing skills shortage in the UK particularly within Tech.
  • There may be a greater need for UK Companies to apply for sponsorship licences to perhaps cover both EU talent and also of course talent from outside of the EU (as is current practice).
  • There are an expanded list of sponsorship licence categories and Companies need to decide which (if any) are more appropriate for them if needed.
  • There is an expectation that there will be greater restrictions on low skilled workers looking to work in the UK with visa’s capped at 2 years. This cap is also to extend to high skill workers with some visa categorisations, where they will be able to stay for 5 years without settlement status.
  • Companies should think about ensuring they are tightening up their compliance checks, including Right to Work checks (which are the minimum which an employer has a responsibility to carry out currently). Compliance is extremely important for sponsorship licences and failure to comply could mean loss of licences and the personnel sponsored by the Company.

Settled Worker Status

In December 2017, the Government announced that it had reached an agreement with the European Commission on citizens’ rights, under which EU citizens arriving in the UK by 29 March 2019 will be entitled to apply for “settled status” when they have five years’ continuous residence in the UK. This will give them the right to stay indefinitely. Settled Status is currently known as Permanent Residence, however those currently living and working in the UK under a Permanent Residence agreement will need to also apply for Settled Status.

Applicants who are not able to give evidence of five years’ continuous residence necessary to obtain settled status, but who can evidence that they were resident before the specified date, will be given temporary status. This means that they will be given the opportunity to build up the required longevity of residency to be able to apply for Settled Status.

 


If you have any questions about Individual Mobility,
get in touch with Jacqui Brown,
HR Manager at Goodwille. 

jacqui.brown@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.

Changes to Childcare Vouchers – Join a Childcare Voucher Scheme before 6 April 2018

There will be changes to childcare vouchers from 6 April this year. Make sure to join a childcare voucher scheme before this date to offer your employees childcare vouchers as an attractive employee benefit.

Childcare vouchers

Childcare vouchers are an employee benefit offered by employers to help with approved childcare costs, for example a staff nursery. Employees can take up to £55 a week of their wages as childcare vouchers, which they don’t pay tax or National Insurance on. Per year, this adds up to around £1,000 that each parent can save on childcare costs. For businesses – offering childcare vouchers instead of offering to cover childcare costs for your employees can save the company up to £402 per year per parent.

Changes to childcare vouchers

From 6 April 2018, childcare voucher schemes will close to new applicants. This means that employers who want to offer their employees childcare vouchers as an employee benefit must join a childcare voucher scheme before this date. The changes only apply to new applicants, and will not have an effect on companies and employees already registered on a scheme. Employees of companies who join the childcare voucher scheme before 6 April can keep getting vouchers as long as they stay with the same employer and the employer continues to run the scheme, and they don’t take an unpaid career break of longer than a year.

Offering benefit schemes such as childcare vouchers is a way to attract employees, as it can cover living costs without incurring any tax for the employee. It can also save your business money, so it’s worth having a look at joining a childcare voucher scheme now before it is too late.

Goodwille can guide you through the changes to childcare vouchers and the effects this might have on you, your employees and your business. We can also help you with joining a childcare voucher scheme, and other employee benefit schemes.
Get in touch with us today if you want to know more.

Hiring UK Employees: What is considered a disability in equality legislation?

If you are thinking of entering the UK market, it is likely you will have some questions about hiring employees in the UK. All employees in the UK are protected by the Equality Act 2010. The act protects those with a disability from suffering detrimental treatment in the recruitment process, and in the course of their employment, as a result of their disability. However, not all disabilities are obvious and so it is important for employers to understand what amounts to a disability under the law, to ensure you are compliant with your obligations under the Equality Act 2010. This post looks at some of the things you might not be aware of in relation to employees with a disability.

What amounts to a disability under the law? 

Under the Equality Act, a disability is described as being a mental or physical impairment which has a “substantial and long-term adverse effect on the person’s ability to carry out normal day-to-day activities”. Employers do not need to establish what the cause of the impairment is, or even categorise the impairment as physical or mental. Many disabilities cause both physical and mental impairment. Similarly, disabilities do not need to be apparent for the applicant or employee to qualify for protection under the Equality Act.

However, a disability must be long-term to qualify the candidate for such protection. Long-term is defined as lasting for one year or more, and likely to last the rest of the person’s life, or to reoccur. A disability does not have to be continually present to qualify, and may change in severity periodically.

There are exceptions for certain people on having to show a substantial and long-term effect on their ability to carry out day-to-day tasks. This applies specifically to those who have cancer, HIV, or multiple sclerosis. The Equality Act details that a person with any of these conditions is considered to have a disability from the day they are diagnosed. Furthermore, where a consultant ophthalmologist has certified a person as blind, severely sight-impaired, or partially sighted, the Equality Act defines that person as being disabled.

As you can see, discrimination and equality law can be complex, so it is always best to seek advice and assistance on matters that affect you. At Goodwille, we have several specialists with extensive HR experience who can advice you on equality legislation and any other issues or questions you may have regarding employees in the UK. Get in touch with us today for more information.

Does discrimination employment law apply to recruitment in the UK?

If you are considering setting up a UK company, you might have some questions about UK law and recruitment. Whilst you might have some grasp of your legal obligations after you have taken on employees, it can be difficult to navigate what is required before the employment relationship is established. This post looks at some things recruiters should consider when setting up a UK company.

What is considered discrimination in recruitment? 

If you set up a company in the UK, your business has a responsibility to make sure that no unlawful discrimination takes place during the recruitment process. Unlawful discrimination means negative treatment of a candidate on the grounds of disability, age, gender reassignment, maternity and/or pregnancy, marriage and civil partnership, race, religion or belief and sex or sexual orientation.

Can I refuse to give an interview on the grounds of a protected characteristic? 

No. Although the candidate may have simply given a CV or contacted you about the job, it is unlawful not to consider them for the job simply on the grounds of one of the protected characteristics listed above. You may, of course, refuse candidates with a protected characteristics if they are not suitable for the job, for example, if they do not have the qualifications or skills required.

Can I ask questions about a protected characteristic in an interview? 

Generally, you may not ask about protected characteristics in an interview. For example, you may not ask whether a candidate is married, has children or whether they plan to have children. You may, however, ask about a health condition or disability where there are job requirements that cannot be met by the candidate unless you make reasonable adjustment to the workplace or working practices, you are taking positive steps to recruit someone with a disability, or where you need to find out if the candidate needs assistance to attend another stage of the selection process.

What can I do if I am unsure? 

Goodwille has assisted hundreds of companies all over the world in understanding the law and recruitment practices of the countries we operate in. Contact us today to discover how we can help you.

We’re recruiting – HR Advisor

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 kind of professional services required to establish themselves and flourish in the UK. These include Corporate Legal, Finance, People Management, Payroll & Virtual Offices.

We are looking for a HR Advisor to provide our extensive international client base with a full spectrum of high quality and compliant UK employment law. Within your role you will be responsible for:

  • Delivering HR advice to clients directly and through colleagues
  • Acting as the HR advisor to some of Europe’s most exciting start-ups
  • Drafting & reviewing HR documentation and agreements
  • Covering HR issues including employee relations, organisation design, policies, procedures, implementation of contracts, benefits, benchmarking, recruitment & training solutions.
  • Ensuring quality standards & SLA’s are met
  • Supporting departments with adhoc requests

The applicant should be experienced working as part of a HR department, either as part of an inhouse team or outsourced advisor. This is an exciting opportunity to be part of, and involved in developing and expanding the offering of Goodwilles newest department.

Reporting to the HR Manager you will be expected to confidently provide HR advice independently, whilst covering for the HR Manager as required. Although an international language is not mandatory, being able to speak a Nordic language would be beneficial. In joining us, you will become part of a close-knit and growing HR team, and part of a modern, forward-thinking and inclusive organisation, capable of offering a stimulating environment for you to work in.

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 (Sainsburys, 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 or for you to hang out with colleagues.
  • Yoga (London only by colleague)

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 jacqui.brown@goodwille.com
www.goodwille.com

Things to to consider when recruiting UK employees

Things to to consider when recruiting UK employees

The UK labour market has an international reputation for being flexible and employer-friendly, particularly in comparison with its European peers. However, there are a number of laws, customs and idiosyncrasies that it’s important to be aware of if you’re setting up in the country for the very first time. In this guide, we’ve outlined a few things that you should be aware of when you’re recruiting in the UK.

Meeting tax obligations for your employees

Unlike some other countries, most UK employees don’t have much responsibility for their own tax affairs. Instead, their employer deducts tax and some other items from their salary before it is paid for them. This will require you as their employer to work with HMRC to ensure that the correct amounts are paid and that you remit these sums to them on a regular basis. You’ll then have to give your employees a P60 form, which is an annual summary of the amount of tax that you have paid on their behalf.

Tax can be a complex business in the UK. VAT obligations vary significantly depending on your sector and the particular arrangement you have with HMRC. If you aren’t confident, it’s well worth getting an expert to look at your setup to make sure that you don’t get caught out.

Minimum wage legislation

The UK minimum wage is split into a number of bands depending on whether an employee is an apprentice and how old they are. That means that the wage ranges from £3.50 an hour for an apprentice to £7.50 an hour for an employee aged 25 or over (known as the National Living Wage). The government has begun naming and shaming companies who do not comply with minimum wage legislation, so it’s vital that you get this right. Make sure you’re aware of what counts towards hours worked. You may be required to pay employees when they’re travelling between assignments for instance.

As with any country, the UK has a number of rules and customs that make it different from other markets. Trying to apply a model that’s worked elsewhere to your UK operations could easily get you into trouble. Before you recruit your first UK employee, please ensure that you’re up to speed with your obligations, and get in touch with Goodwille today for further guidance.

Good manager vs. bad manager

When it comes to setting up and running a business, effective management and leadership is a key component for a company to succeed. Some people are privileged to work with the best bosses, but time and time again, many employees come across bad managers, too.

If you want to ensure that you are running your business effectively, then you need to make sure that you are managing your employees well. But what is a good manager, and how does this compare to a bad manager? While all managers have the same kinds of responsibilities in the workplace, there are definitive differences between a good boss and a bad boss.

A bad manager commands; a good manager asks

With all businesses, there are tasks that employees are required to complete in order to accommodate the needs of the company. While that is understandable, it is important to note that piling on an extremely heavy amount of workload isn’t the most effective way of getting your workers to complete tasks.

Assign tasks that are easily manageable, coach your colleagues and make sure that you communicate the aims and goals effectively in order to allow your workers to be productive and get the job done.

A bad manager says ‘I’; a good manager says ‘we’

Bad managers tend to be selfish and they’re less likely to be attentive to the needs of their employees. Clearly, this is a recipe for disaster in the world of business ownership because it’s important to care about your workers and show respect. Good managers recognise the importance of working together as a team and they understand that all contributions from workers are essential.

A bad manager plays the blame game; a good manager takes responsibility for their actions

Sometimes, things will go wrong. Unfortunately, that’s what happens in business – things don’t always work out, but handling the situation well is key. A bad manager will blame their workers for failures. A good manager will take full responsibility, come up with solutions, learn from their mistakes and move on.

A bad manager takes credit; a good manager gives credit

As the saying goes, ‘credit’s where credit’s due’. It’s imperative for bosses to give praise to their employees when it’s deserved. Praise is rewarding and it boosts confidence and morale.

Have you recently set up a UK company?  Get in touch with us regarding our HR services.

Human resources management tips

If you’re planning to set up a UK company or open a UK office to expand your overseas operations, getting the best from your workforce will be crucial to your success.

In fact, there are usually just two reasons why your employees aren’t performing consistently at their best:

1. They can’t
2. They simply don’t want to

Your staff either lack that essential something that prevents them from performing with excellence, or they never achieve what they are capable of because they simply have no desire to do so.

It’s important that managers think about these causes as separate issues, requiring different approaches and strategies to remedy them.

Employees who don’t perform because they can’t

Sometimes, irrespective of how much you ask, demand, instruct or cajole your staff for a certain level of performance, you just don’t get it, because they simply are not able to give it to you. Some employees are masters of the ‘can’t’ syndrome as an excuse for laziness and lack of motivation.

Tackle this by asking them one question: “What makes it difficult for you to do your job in the way I’m asking you to, with excellence, consistently?”

There are four legitimate barriers that could be the problem: physical barriers, time barriers, wherewithal barriers, and know-how barriers.

It’s a simple task to identify these barriers. If your staff are given an opportunity to communicate their issues without fear of recrimination, it will be easy enough to compile a list of problems.

The easiest way to eliminate all these barriers to performance is to listen to your workers. Most people will offer a solution to their problems given the chance; you might often hear them say, “If I was in charge of this department, I’d …” Ask your staff for their ideas and give them the power to implement the solutions. If the solution doesn’t work, give them another chance and praise them publicly when success is achieved.

Employees who just don’t want to

Having removed all the barriers to excellence, you have effectively left nothing for the lazy to hide behind. Once the “can’ts” have been removed, what’s left are those who excel, and those who clearly need replacing.

It’s never easy to replace staff but it can be a necessary evil. Staff members who perform to a high level will not tolerate lazy co-workers who they have to carry and may eventually become resentful or even leave for fear of not being appreciated. Therefore, getting rid of slackers is a necessary part of managing excellence; in doing so you raise the bar for everyone and reward those who have been carrying the dead-wood.

The first step…

Set your employees up for success by removing barriers and listening to their challenges and you will find the mystery of HR management simply disappears. For more expert HR advice, contact Goodwille.

Are you a good boss?

When you take the big decision to set up a UK company, you will be managing a diverse range of workers from many different backgrounds. So, what makes a good boss?

Lead by example
Employees have far greater respect for a boss who walks the walk rather than merely just talks the talk. After all, where’s your credibility if your staff feel unable to ask you for guidance and help in times of crisis. Always seek to lead by example.

Honesty and integrity
No one likes working for a boss who misleads clients and tries to rip them off. Always demonstrate honesty and integrity in all your dealings with customers and staff. This will gain the trust and respect of your workers who will treat you and your company in the same way.

Listen and ask
Two-way communication is vital for a good staff/management relationship. Ask your employees what they think about new projects, software systems or product design.

Inclusion in management decisions and research enhances an individual’s sense of value to the company and you may well receive some extremely useful and constructive feedback. Make sure that you keep everyone in the loop about new developments, changes in company policy and the like. Employees do not like being kept in the dark about matters concerning their future!

Empower your workers
No-one likes to feel powerless; a good boss allows his staff a little discretion and flexibility. Be prepared to step in with discreet correction if necessary and avoid being heavy handed with your directions and instructions. Allow your staff a little scope to make decisions and solve problems and you’ll be pleasantly surprised with how much they appreciate the freedom.

The right toolkit
No-one can perform a role to their absolute best if they don’t have the right tools for the job. It’s vital that staff have the correct procedures in place such as the right software and systems, appropriate hardware and training. Being adequately equipped helps to build confidence which can only improve performance and boost staff morale.

Give and take
If you allow your staff a degree of flexibility and understanding when you deal with domestic emergencies and personal issues, they will repay you with loyalty a thousand times over. On that occasion when you need to ask them to work late to meet an important order, they won’t hesitate to help you out because you did the same for them.

Help your business achieve success
Ask yourself: if I were looking for a job, would I want one with this company working for this boss? If the honest answer to that is ‘yes’, you’re on the right lines. However, if you’re looking for help with your people management, contact us at Goodwille. We’re here to help with a range of services for those looking to set up a UK company or to help their business achieve expansion success.