Setting up a business in the UK (Ian Phipps)

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  • 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 / LLPs too much uncertainty around future tax treatment

    Strong recommendation is to use a limited company

  • Ease of Set Up - 1

    5

    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

    6

  • 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

    7

  • Corporation tax

    8

    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

    9

  • 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:

  • 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

    12

  • 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 cant 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

    15

  • 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

    16

  • Oury Clark and Norway

    The following are among the Norwegian companies that Oury Clark has helped and continues to help:

    17

  • Ian Phipps ACA CTAIan.phipps@ouryclark.com

    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