How to start your business in the UK: Registration procedure and taxation
BY READERS DIGEST
11th Nov 2021 Down to Business
Opening a business in the UK means working in an economically stable market with the ability to scale internationally.
. The high solvency of the population, relatively low taxes (with the correct administration and accounting), ease of management, and working with foreign partners — all this sounds extremely tempting. However, when registering and developing a business in the UK, there are nuances that you should learn about in advance.
Registration procedure
The first step in registering a business in the UK is opening an account. Further, you will probably need to give third-party access to bank accounts for accountants and company networks, so keep this in your mind during the registration. In the UK, this stage can be performed online. To do this, fill out an application on the relevant website like Icon offices and indicate the following data:
- unique company name;
- legal address;
- data of the founders;
- confirmation of financial capabilities;
- copies of documents;
- description of the business idea
First of all, keep in mind that you can both open a company from scratch and purchase a ready-made business. The name of the new organisation must be unique. The uniqueness check is carried out directly by the registration authorities.
The list of documents required when submitting an application includes:
- application;
- memorandum of association
- charter of the company
- founders IDs
Business registration in the UK is carried out at Companies House. The result of the application approval is a certificate. It is sent in electronic form immediately after the decision of the relevant authorities. The paper is received a week later.
Types of companies in the UK
Today, business in the UK is conducted in one of four forms. Each type has its nuances and advantages in a certain sphere of activity. An entrepreneur can register:
- Private Company Limited by Shares. The guarantee of the responsible person is the personal capital;
- Private Company Limited by Guarantee. For example, this includes charitable foundations and various non-profit enterprises. The surety is the assets of the linked operating firm;
- Private Unlimited Company. This is a company whose founders’ liability is not limited. It must have at least two founders;
- Private Limited Company. Shareholders’ liability is limited to a block of shares. When opening a company of this format, you need at least two founders and fairly significant capital to start.
UK Taxation
Among the advantages of doing business in the UK, the issue of taxes deserves special attention. The UK tax system is considered the most comfortable for doing business in Europe.
"The UK tax system is considered the most comfortable for doing business in Europe"
Nevertheless, it has its nuances and difficulties. Therefore, most often, you cannot do without a tax consultant.
Legal entities in the UK are required to pay the following taxes:
- income tax;
- value-added tax;
- income tax for the sale of fixed assets;
- annual excise tax on operated vehicles.
Note that for individual entrepreneurs doing business in England, non-taxable income is £8,000/year. In addition, some counties in the UK still have a business tax levied on non-residential tenants.
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