The UK has a favourable tax system which proves to be attractive to business owners. This includes:
• Low overall tax rate of 19% (2019/20), reducing to 17% in April 2020
• Generous R&D tax relief schemes (more below)
• Tax relief for the creative industries (up to 15.2% for video games)
• Lowest corporation tax in the G20
• Plant and machinery allowances
With over 3.6 million limited companies in the UK, setting up is quick, inexpensive and simple.
• Only one director and one shareholder are needed, with neither having to live in the UK.
• Registering for payroll is quick and easy to administer.
• Registering for VAT is only needed if your turnover is over £85k.
The UK has one of the most generous and easily accessible R&D Tax incentive schemes:
• SME R&D Tax Relief can be claimed if you have less than 500 staff and a turnover of under €100 million
• SME R&D Tax Relief allows companies to make a 230% deduction (130% of their qualifying costs from annual profit, 100% usual deduction)
• Large companies can claim a RDEC for working on R&D projects
• RDEC is a tax credit for 12% of your qualifying R&D expenditure
• Creative Industry Tax Reliefs for film, animation, video games, theatre, high-end TV, children’s TV, orchestra and museums and galleries.
Protecting your personal and customer information in today’s data-driven world is as important as ever:
• GDPR came into practice in May 2018, designed to harmonize data privacy laws across Europe
• Reshaping the way organisation across Europe approach data privacy
• Breaching GDPR can lead to a fine of up to 4% of annual global turnover or €20 million, whichever sum is greater
The UK is the host of many investment schemes, designed to facilitate the growth of small, often new businesses. The most notable schemes are:
• The Enterprise Investment Scheme (EIS) – companies can raise up to £5 million annually, and £12 million in the company’s lifetime
• The Seed Enterprise Investment Scheme (SEIS) – investors can benefit from a 50% tax break
• Social Investment Tax Relief (SITR) – companies can raise £1.5 million in their lifetime
• Enterprise Management Incentives (EMI) – employees can have £250,000 worth of share options at no cash cost to the employee
When hiring individuals as employees of your company, you must:
• Be aware of their employment rights
• Auto-enrol employees into a pension scheme with employer’s contributions – as of April 2019, the total minimum contribution is 8% (3% employer, 5% employee)
• Pay 13.8% of your employees’ salary towards their National Insurance. Employees must pay 12% towards their National Insurance (Category A).
• Operate PAYE as part of your payroll and report your employees’ Income Tax and National Insurance payments and deductions to HMRC on or before each pay day. The amount owed can be worked out with a payroll software
• Clearly state to HMRC what your working relationship is with the employee
There are any options for migrants wishing to establish or join a business in the UK:
• Tier 1 Investor Visa – if you want to invest £2,000,000 or more in the UK and you’re from outside the EEA and Switzerland
• Innovator Visa – if you have at least £50,000 in investment funds for a new business and you’re from outside the EEA and Switzerland
• Start-up Visa – if you’re able to show that your new business idea is innovative and viable. You must also be endorsed by an authorised body that is either a UK higher education institution or a business organisation with a history of supporting UK entrepreneurs
• Tech Nation Visa (Tier 1, Exceptional Tech Talent) – enables the best tech talent around the world to work in the UK’s digital technology sector. The scheme gives opportunities to those with ‘exceptional talent’ and those with ‘exceptional promise’ if the endorsement criteria are satisfied
• Access to UK and European capital markets, including the London Stock Exchange (LSE) and junior markets such as AIM
• AIM is the most successful growth market in the world. Since its launch in 1995, over 3,600 companies from across the globe have listed on AIM
• AIM includes companies operating in more than 100 countries, 40 different sectors and with a combined market capitalisation of over £70 billion
Although London is often the most sought-after location in the UK to start a business, the Northern Powerhouse initiative has focussed on boosting economic growth in the North to reposition the British economy away from London and the South East. Some of the benefits of setting up in the North include:
• Investing in property in the North is significantly cheaper than in London, with average housing prices of £134,736 in the North East and £472,753 in London, as of August 2019.
• Core Northern Powerhouse cities include Manchester, Liverpool, Leeds, Sheffield, Hull and Newcastle.
• As of 2016, the North was home to 7 of the UK’s 27 key tech clusters.
• Improved transport links between Northern cities and between Northern cities and London/Birmingham.
• The Northern Powerhouse Investment Fund providing over £400 million of investment to boost SME growth.
As well as traditional accounting and tax services, we can provide specialist advice to listed companies, UK companies with overseas operations, UK subsidiaries and branches of overseas companies, businesses investing in the UK for the first time, as well as private individuals, family offices and trusts.