3 key ways UK businesses differ from Nordic businesses
Every country has its own way of supporting business development, but there are some big differences between UK operations and those in the Nordic community.
Tax and VAT
The UK fiscal tax year ends on 31st March (and 5th April for individuals), whereas Nordic countries use the calendar year with flexibility for companies to use alternative dates if they’d prefer. At 20%, standard VAT in the UK is much lower than that of the Nordics’ 24-25%, though obviously there are concessions on certain goods.
UK Corporation Tax is currently set at 20%, whereas Denmark (22%), Norway (25%) and Sweden (22%) all pay higher rates; only Iceland and Finland match UK levels. Make sure you have access to good quality financial services to understand the intricacies of UK law, and keep on top of your accountancy needs.
Maternity and paternity leave for employees
The UK asks that a new mother takes at least two weeks’ leave after giving birth (and more in factory environments). However, a mother’s leave can last up to 52 weeks, with 26 considered ‘Ordinary’ and the rest as ‘Additional’. According to the OECD, the average UK maternity payment rate is 31.3% of the mother’s normal earnings; all Nordic countries offer a higher percentage of earnings as maternity pay, and in Norway that figure is 98.7%.
The Nordics typically have a high uptake of paternal leave, whereas many new fathers in the UK don’t have a shared parental leave or paternal leave option. Considerations like these will affect your HR strategy.
Hierarchy and business manner
Many businesses in Denmark, Norway and Finland have a flat management hierarchy, where any employee – no matter how junior – can raise concerns with very senior staff, a bit like Goodwille. In contrast, most UK businesses have a taller hierarchy with less interaction between CEOs and general employees.
Furthermore, UK business relies on plenty of written communication; corporate deals rarely rely on verbal agreement alone. However, verbal agreements are legally binding in countries like Iceland and Sweden.
If you bear these factors in mind when you’re expanding your company, you’ll be well equipped for the future.
Goodwille help Nordic businesses get started in the UK and can help with all the practical and cultural advice you need to get off to a good start in the UK market. Get in touch with us today to find out more.