Transcript
Page 1: Setting Up, Running and Funding your Business in the UK

14 July 2012

UK as Europe’s innovation hub Setting up, running and funding your business

Page 2: Setting Up, Running and Funding your Business in the UK

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Table of Contents

1. Setting up your business

• Tech Clusters

• Advantages offered by the UK

• Legal issues

2. Running your business

• Digital media

• Sales and marketing analysis

• Legal issues

3. Funding your business

• Company valuation

• Financial considerations

• Legal issues

• Fundraising strategy

• Investment incentives: SEIS, EIS

• Gearing up for Venture Capital

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SETTING UP YOUR BUSINESS

Tech clusters

Advantages offered by the UK

Legal issues

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• London Tech City (Silicon Roundabout) Mind Candy (Moshi Monsters)

Tweetdeck

Last.fm

• Silicon Fen (world class tech-hub in Cambridge) ARM ($7 billion valuation)

Advanced RISC Machines

• Silicon Glen (tech –hub in Scotland) Rockstar North (creators of GTA)

• Bristol ICERA

Setting up your business Tech clusters

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• The small business rate relief

• New immigration routes for entrepreneurs

Tier 1 Entrepreneur visa Applicant must either have access to £200,000 or to £ 50,000 + Conditions

Tier 1 Graduate Entrepreneur visa Does not apply if applicant is outside UK at time of application

• Small businesses get capital gains tax breaks for their first £10m of profit

• R&D tax credits of up to 200 per cent (increasing to 225 per cent in 2012)

• Access to UK Trade & Investment’s export services

Setting up your business Advantages offered by the UK

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• Intellectual property e.g. patents, copyright, trademarks and design rights

• IPR exploitation as a revenue stream

• Contracts and other agreements

• Legal structures for enterprise in UK

Unincorporated association

Limited Company

Limited Liability Partnership

Community Interest Company

Setting up your business Legal issues (1)

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RUNNING YOUR BUSINESS

Digital media

Sales and media analysis

Legal issues

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• Search engine optimisation

• Mobile and Social media:

• Online reputation management

• Viral Marketing

Running your business Digital media

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• Sales funnel

• The buying cycle: AIDA

• 4Ps: Product, Price, Place and Promotion

• Competition and risk analysis: SWOT & PESTLE

Running your business Sales and marketing analysis

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• Taxation

Corporation Tax

Capital Gains Tax

National Insurance

Income Tax

VAT

Running your business Legal issues (1)

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• Corporation Tax

Rate 2012 values

Small profits rate 20%

Small profits can be claimed by qualifying companies with profits at a rate not exceeding

₤300,000

Marginal relief lower limit ₤300,000

Marginal relief upper limit ₤1,500,000

Standard fraction 1/80

Main rate of corporation tax 25%

Special rate for unit trusts and open-ended investment companies

20%

Running your business Legal issues (2)

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• Capital Gains Tax

Rate 2012 values

Rates for individuals 18% / 28%

Rates for trustess and personal representatives 28%

Annual exempt amount for individuals and personal representatives

₤10,600

Annual exempt amount for most trustees ₤5,300

Rate on gains subject to Entrepreneurs’ Relief 10%

Capital Gains Entrepreneurs’ Relief 2011-2012 values

Entrepreneurs relief lifetime limit of gains ₤10,000,000

Running your business Legal issues (3)

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• National insurance contributions (1)

Employee and employer rates and thresholds £ per week unless stated

2012 values

Lower Earning Limits for class 1 NICs £102.00

Upper Earnings Limits for Employees’ Class 1 NICs

£817.00

Upper Accrual Point £770.00

Primary Threshold £139.00

Secondary Threshold £136.00

Running your business Legal issues (4)

Employee’s (Primary) Class 1 contribution rates 2012 values

2011 – 2012 weekly earnings from £139.01-£817.00 12%

2011 – 2012 weekly earnings above £817.00 2%

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• National insurance contributions (2)

Employee’s contracted out rebate 2012 values

For both salary-related (COSR) and money purchase (COMP) schemes between LEL & UAP

1.6%

Running your business Legal issues (5)

Married women’s (primary) Class 1 contribution rates

2012 values

2011 – 2012 weekly earnings from £139.01-£817.00 5.85%

2011 – 2012 weekly earnings above £817.00 2%

Employer’s (secondary) Class 1 contribution rates

2012 values

2011 – 2012 weekly earnings from £136.00 13.8%

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• National insurance contributions (3)

Running your business Legal issues (6)

Employer’s contracted out rebate 2012 values

Employer’s contracted out rebate – salary related schemes (COSR) between LEL and UAP

3.7%

Employer’s contracted out rebate – money purchase schemes (COSR) between LEL and UAP

1.4%

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• Income tax

Income tax band Income tax rate on

non-savings income Income tax rate on savings

Income tax rate on dividends

£0 - £2,560 Starting rate for savings

Not available 10% Not applicable – see basic rate band

£0 - £35,000 Basic rate

20% 20% 10%

£35,001 - £150,000 Higher rate

40% 40% 32.5%

Over £150,000 Additional rate

50% 50% 42.5%

Running your business Legal issues (7)

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• VAT (1)

Paid quarterly if annual turnover exceeds £73,000

Can be claimed back on some goods/services e.g. office supplies, vehicle servicing, fuel

Running your business Legal issues (8)

Category VAT rate

Exempt supplies: education, finance, insurance, and the services of doctors and dentists

0%

Food (but not restaurant or takeaway meals), children’s shoes and clothing, prescriptions, books and newspapers, new house sales and prescriptions

0%

Reduced rate: includes fuel and power used in homes and by charities

5%

Standard rate: goods not falling in the above 20%

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• VAT (2) – Optional flat rate scheme

Allows businesses with up to £187,500 turnover to make a flat-rate calculation for VAT payments based on turnover, rather than having to record the VAT of every sale and purchase

The flat rate varies by sector e.g. 2% for retailing food, confectionery, tobacco, newspapers or children's clothing

11.5% for labour-only building or construction services, Computer and IT consultancy or data processing, lawyer or legal services, computer repair services, management consultancy, lawyers & legal services

Running your business Legal issues (9)

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FUNDING YOUR BUSINESS

Company valuation

Financial considerations

Legal issues

Fundraising strategy

Investment incentives: SEIS, EIS

Gearing up for venture capital

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• What is my company worth?

• Equity: how much should I give away?

• Capital injections: how do they affect my company valuation?

• What do investors look for?

Funding your business Company valuation

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• Sources of finance (debt and equity): 3 Fs: Family, Friends, Fools

Banks, Angels and VCs

Crowd Funding: crowdcube

Incubators : Google Campus, Imperial Innovations, Springboard, The Difference Engine, Techhub, General Assembly

Government Agencies: Technology Strategy Board, KTP

• Financial instruments that need to be understood

• Forecasts and accounting

• Exit Routes i.e. the Investor’s Perspective e.g. MBO, IPO, Sale

Funding your business Financial considerations (1)

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• Proof of Concept/Market

• Structure the team

• Choose Investment Strategy

• Investment Documents

• Negotiation

• Transaction

Funding your business Fundraising strategy

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• Seed Enterprise Investment Scheme (SEIS)

50% Income Tax relief on ₤100,000 limit

Capital Gains Tax exemption upon share sale

Balance sheet gross assets ≤ £200,000

• Enterprise Investment Scheme (EIS)

30% Income Tax relief on ₤1m limit

Capital Gains Tax exemption upon share sale

Balance sheet gross assets ≤ £15m before & £16m after investment

Funding your business Investment incentives

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• Golden rules and common misconceptions

• The investment process including key points and time scales

• Deal structuring: entrepreneur/investors point of view

• Post-investment focus

Funding your business Gearing up for venture capital

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• Services offered to entrepreneurs by Amoo

Investment readiness

Financial control

Management consulting

IP-Skim™

• Events organised or sponsored by Amoo

Amoo Booster Series Meet VCs, Patent Attorneys and fellow entrepreneurs

place4BRICs Holds events with Amoo to explore topical themes within the start-up community

Summary


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