setting up a business in the uk (ian phipps)
TRANSCRIPT
An Introduction to Setting Up a Business in the UK
by Ian Phipps of Oury Clark
at Central Working Whitechapel
2 September 2014
Overview
• Very easy to set up a business:
• fast
• low cost e.g. £1 minimum share capital (or 10% of the cost of a pint
of beer in Norway…………! )
• Pro-business government:
• relatively low taxes
• “light touch” on legislation
• flexible employment laws
Structure
• Commercial Considerations - often most important!
• Subsidiary (limited company) or “UK Establishment” (branch of
overseas parent company) ?
• tax position
• accounts filing requirements
• dealing with various Government agencies
• customer perception
• Partnerships / LLP’s – too much uncertainty around future tax treatment
• Strong recommendation is to use a limited company
Ease of Set Up - 1
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• Formation of a Limited Company
• quick (can be done in less than 2 hours…)
• inexpensive
• minimum share capital £1
• 1 Director, 1 Shareholder minimum
• signature and process now digital
Ease of Set Up - 2
• VAT (sales tax) registration
• £81k Threshold
• All online
• Non-UK company can register
• Payroll Registration
• Quick (10 Days)
• Relatively simple to administer
• Required for all UK employees
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Employment
• Self-Employed or Employee?
• Cheaper to be self-employed, HMRC will always want employees.
• Substance over form
• Grey area – Things to consider
• Personal Service (right of substitution)
• Mutuality of Obligation
• Right of Control
• Provision of Own Equipment
• Financial Risk
• Opportunity to Profit
• Length of Engagement(s)
• Benefits
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Corporation tax
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• £0 - £30Ok: 20%
• £300,001 - £1.5m: 21.25%
• > £1.5m: 21%
• Above bands divided by no. of “associated” companies
Tax reliefs
• Main tax reliefs in the UK likely to be of relevance
• Research & Development Tax Credits
• Patent Box
• Enterprise Investment Scheme (“EIS”)
• “SEIS”
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Research & Development
• Research & Development
• Significant tax incentives for companies undertaking R&D in the UK
‘An R&D project is one that seeks to achieve scientific or technological
advances. It will aim to advance the overall knowledge or capability in a field
of science or technology. It will involve significant scientific or technological
uncertainty.’
Research & Development
• SMEs get 125% in additional tax credit:
<500 Employees; and, either
Turnover < €100 million; or,
Balance Sheet < €86 million
Therefore a small company spending £1m on R&D gets extra tax deduction of £1.25m
• If loss making a tax credit (cash back) can be claimed
• Note: R&D has to be directed from UK, but not necessarily performed in UK nor does the IP need to be owned in the UK
Patent Box
• From 1 April 2013:
• 10% tax rate for income from Patents
• UK & European Patents only (EEA counts)
• Relief to be phased in over 5 years
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EIS
• 30% income tax relief for investor, for investments up to £1m
• Sale of shares is free of Capital Gains Tax after a qualifying period
• Capital losses on disposal of shares can be offset against income
• Other capital gains can be deferred by investment in EIS shares
• Qualification criteria to be met by fund-raising company
SEIS (“Seed” EIS)
• Available to very small start-up companies: ≤ 25 employees and ≤ £200,000
assets
• Investor receives 50% of the investment as income tax relief
• Investor may also get Capital Gains Tax relief of up to 28% (78% relief in total)
• Individual maximum: £100,000
• Company can raise a maximum of £150,000
• Investors can be company directors but can’t own more than 30% of the
company
The Oury Clark “Group”
Unlike most professional firms...
we see the whole picture.
• Commercial and pragmatic – we run
businesses…………
• A broad and high level of Interdisciplinary
professional skills at our core
• Coordination increases speed and
efficiency and decreases cost
• Specialists in overseas companies
establishing in the UK for 20 years
• Offices in Central London and beside
London Heathrow Airport
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Oury Clark Services
• Tax, audit, statutory accounts, back office (payroll, VAT)
• Immigration, employment, company commercial, property, IP
• Staff benefits, mortgages, pensions, healthcare, investments
etc
• Development/replacement capital, refinancing, M&A, MBO/MBI
• Individual authorisation, On-going compliance & reporting,
Registration advice and Systems & policy development
• Bookkeeping, Credit control, Management
accounting/reporting, Payment services, Payroll and VAT
compliance
• Managed bespoke service for all industries
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Oury Clark and Norway
• The following are among the Norwegian companies that Oury Clark has helped
and continues to help:
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Ian Phipps ACA [email protected]
M: +44 (0) 7866 518392
London Office Thames Valley Office 10
John Street 58 Herschel Street
London Slough
WC1N 2EB Berkshire, SL1 1PG
+44(0)20 7067 4300 +44(0)1753 55 1111