Business culture can vary significantly. We unpack several important factors you’ll need to consider if you’re planning on relocating your business to the UK.

Heading for the UK with business

The UK is renowned for its bountiful business opportunities and thriving corporate environment. The country’s political and financial stability, along with its strong currency and low corporation tax rate, make it a highly sought-after place to conduct business. However, there are various things you’ll need to be aware of and factors you’ll need to consider before you relocate your business to the UK.

Do your market research

Before you decide to spend a substantial sum relocating your business to the UK, you should first identify what opportunities exist and whether there’s an adequate market for your offering.

Once you’ve identified a market, you’ll also need to consider how, when and where to effectively approach it.

Establish your business structure – subsidiary vs branch

Setting up a subsidiary in the UK

A subsidiary operates as a separate legal entity from its parent company. If you wish to set up a subsidiary, you’ll essentially need to establish a new UK company. This can be a complex process. However, UK firms tend to be more eager to conduct business with subsidiaries as they’re governed entirely by UK law. Another perk is that the parent company can’t be held accountable for any decisions or actions made by the UK subsidiary.

Setting up a branch in the UK

A UK branch operates as an extension of its parent company and remains dependent on it, which means that the parent company has a greater level of control. A branch may defer its legal liability to or share it with its parent company. Should your UK branch be unsuccessful, you’ll be able to close it without any formal notice.

The business structure you employ will determine how you file for your taxes, whether you qualify for any tax benefits and the amount of paperwork HM Revenue & Customs (HMRC) will require. We recommend getting in touch with an SME accounting expert about UK business start up services before making your decision.

Determine your staffing requirements

Establishing a good workforce can seem like a mammoth task. Outlining your requirements before you begin your search can help ensure the process runs more smoothly and quickly.

You’ll need to identify the following:

  • The number of staff you require and which positions need to be filled
  • The skills and qualifications required for the relevant roles
  • Whether you plan to hire local employees or bring staff over from your home country

If you wish to bring staff over to the UK from your home country, you’ll need to ensure you’re able to get them the correct work permit. It is always a good idea to seek assistance from an immigration specialist to ensure things go according to plan.

Seek local financial and legal advice

The UK’s laws and regulations are highly accommodating for business. Despite this, the legalities of conducting business in the UK will still be different to that of your home country and navigation around these should be met with local expertise.

For example, you shouldn’t apply the same employment contract in UK as you did in your home country, as it can leave loopholes.

Local knowledge in these spheres is indispensable and will only stand to benefit your business.

Register for tax

UK Corporation tax – how it works

The UK has one of the lowest corporate tax rates in the developed world – one of the many reasons businesspeople gravitate towards the country.

A subsidiary will be subject to UK Corporation Tax on all profits from the UK and abroad, while a branch will only be required to pay Corporation Tax on profits stemming from the UK.

When to register for VAT in the UK

Value Added Tax (VAT) is a tax that business owners must pay to HMRC when selling goods or services. You may only charge VAT on your offerings and claim VAT back on your expenses if your business is registered for VAT.

Once your taxable turnover is more than £85,000 in a 12-month period, you’ll have to register your business for VAT. You must also register if you predict your business will exceed the threshold in a single 30-day period. Be sure to keep track of your revenue to see if sales are approaching the £85,000 registration point.

Insurance

Finally, you’ll need to assess what your insurance requirements are. In the UK, it’s compulsory to take out employer liability – the rest is up to you.

Your insurance requirements will differ according to your company and can range from director’s insurance to coverage of your information technology (IT).

Moving your business to a new country can be a very complicated and technical process. Personalised advice from a small business accounting expert is a key factor in ensuring that your business’s transition is a smooth and successful one.


If you need local financial advice for your business, our team of experts are here to help. Get in touch via email on accounting@sableinternational.com, or give us a call on +44 (0) 20 7759 7553, or simply fill out our contact form and we’ll get back to you.

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