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Business in uk

Business in uk

Today I will deal with topic related to starting a business in the UK. It is a relatively simple state of affairs, if we focus on the creation of the company because running it – it is much more complicated story. England ranks first in Europe and fifth in the world as the easiest place in terms of running your own business and the World Bank states that just 13 days to set up a business in the UK are enough.

The company in the UK compared to the European average, where the time of establishing the company is 32 days, it is an activity, which measures are very quickly allocated and open labor market and liberal laws is a great incentive for all Europeans who, in the UK want to start their business.

business in the UK

Time required to start a business (days)

The company in England

In addition, it is worth to mention that everyone from the European Union can establish a company in the UK. In the UK there is no restriction on the transfer of profits and capital, or borrowing by foreign companies, there is no requirement to hold special licenses or permits except:

  • the provision of banking,
  • insurance and investment advice,,
  • trafficking in the manufacture of certain categories of medicines, poisons, chemicals

The company in England and the same English law offers entrepreneurs really various legal forms. And the most popular legal forms is here LTD brand. We have also the choice between:

  • PLC – Public limited company, a type of company
  • LLP – limited liability partnership,
  • self employer
  • partnership

Here, the type and scale of company should determine the choice of status, and here most of the businessmen begin to start running company as a sole trader or a limited companySpółka partnerska- limited liability to z kolei forma pośrednia pomiędzy spółką kapitałową a spółką partnerską, tutaj partnerzy partycypują w zyskach i obowiązkach, lecz odpowiedzialność za zobowiązania spółki jest zniesiona do wysokości wniesionych wkładów oraz udzielonych poręczeń. Spółki tego typu zatwierdzane są przez Companies House a sama rejestracja firmy w UK tego typu jest droższa i bardziej skomplikowana niż rejestracja spółki partnerskiej a samo prowadzenie spółki LLP nakłada także na partnerów dodatkowe obowiązki, np. składanie dokumentów do Companies House, audyt i sprawozdania finansowe i tutaj mamy do czynienia z formą prawną wykorzystywaną do prowadzenia firm prawniczych czy audytorskich. Spółka ceniona jest przez przedsiębiorczych i należy do najpopularniejszych form działalności gospodarczej w Anglii, Irlandii, Niemczech, Skandynawii, Stanach Zjednoczonych.

How to start a business in the UK?

The easiest way is to start as a sole trader, because this business can be carried out already when you decide to start a business in the UK. Registration shall be made within three months from the start of business. In the event of not fulfilling this obligation you can be punished with 100 pounds. Here, the self-employed have to pay social contributions and they pay them according to the annual net income. Here, the standard contribution for the self-employed amounts to 2.80 pounds per week. The company in England is very cheap to maintain and current contributions you can check on the website of government. People, whose annual income exceeds 4 745 pounds are required to pay a contribution of 8 percent of revenue, but only up to approx. 31 thousand pounds. Sole trader activity can be carried out under your own name, you can also choose a name for your company. Sole trader can be run either as working at home as well as one-man LTD company. In the UK small and big companies employ workers on a contract basis. Legal structure is here more important than the size of business and number of employees.

The company in England and Fiscal Year

Of course, you have to settle from earned income for the next fiscal year after its completion, here the same tax year is different from the calendar year, as this begins on 6th April and ends on 5th April of following calendar year. Here, after 6th April of each year HMRC send the tax return form to the given address, the completed form must be returned before 31th January of the following year.

company in ukHow to set up the limited liability partnership in England?

How to set up the limited liability partnership in England?

If your company is run by two or more people, the limited liability partnership is created, which is why at the beginning each partner shall register yourself as self-employed person, and partners enter into an agreement among themselves. Each of them, of course, is also responsible with all his assets, because, I advise to accurately choose your own partners, because otherwise it may happen that the bank will ask us to repaid loan, even if we do not take it. It is worth remembering that business in the UK in this segment has no legal status. Here, it is good to know that if any of your partners will back out, a partnership is terminated. It is not the end of the company, but you should again consider what form it should have, whether we want to run the company on your own, or whether we want to look for a new partner. Each person must pay health insurance contributions, you must also pay tax on income of individuals and the amount will depend on the share. In the profits of the company you must not forget that registration of a company in the UK is the basis of the future operation of the company.

Limited liability partnership is the intermediate form between a limited company and a limited liability partnership. Here the partners participate in the profits and responsibilities, but the responsibility for the company’s obligations are abolished to the amount of contributions and granted sureties. Such companies are approved by Companies House, and the registration of a company in the UK is more expensive and more complicated than the registration of a limited liability partnership and running of the LLP also requires partners additional responsibilities, for example, submission of documents to the Companies House, audit and financial statements. And here we are dealing with a legal form used to conduct law or audit firms. The company is valued by entrepreneurs and is one of the most popular forms of economic activity in the UK, Ireland, Germany, Scandinavia and in the United States.

Charged taxes in the UK

As future employers, we know that we have to dock taxes of this kind as income tax and contributions of social insurance. It is also good to know that in England you earn a certain amount of money without tax or at a reduced tax, but it is rather useful for beginner companies. This is called personal allowance in this tax year (2015) is £ 10,600. Then £ 31.785 income is taxed at the rate of 20%, but those exceeding this sum enter in the next tax threshold – 40%. Personal allowance can be used gradually over the year and can be used only once. This means that if someone has two jobs and we are the second employer of the employee, we must dock tax at a rate of 20% from all earnings.

No tax –  0%,£0 – £10 600
Basic rate – 20%,£10 600 – £42 385
Higher rate – 40%,£42 386 – £ 150 000
Additional rate – 45%,over £150 000

Each of the presented business here has or must have advantages and disadvantages, but we do not make decision about running the business once and for all, because if necessary, when the company in England will grow and there will be shareholders, there will be the opportunity to make changes. According to the British experts, the form of conducting business is not the most important. Here, in the UK, a great importance is put to the fact that the company in the UK should have a good and catchy name and how is it presented, or whether it is present on the Internet and, above all, what is the existence idea, because this is the foundation of every successful business.

At the end of my article, it is worth to explain that in general, the profit is the difference between turnover and costs. So, if we are not liable for VAT, turnover is simply the value of our sales.

The calculation of turnover is rather obvious, but it is worth noting some important points to our company in England did not fall and our business in the UK was the right:

  • So, the turnovers are counted by the date of sale, however, if the customer will not pay and there is no prospect of receiving payment, for example for reasons of bankruptcy, this income can be charged off.
  • You should keep in mind that you should show income whether the client asked for an invoice or receipt.
  • As we know every business has an obligation to maintain a reliable record of income, here in the case of hairdressing there may be handwritten daily takings in a notebook, if you do not have a register in the event of inspection. IRS has the authority to assess income at its discretion and impose penalties for the lack of documentation.

Summing up the topic – the company in England – I encourage you to register your own company in England. The costs are small, formalities really few and reasonable tax, we can also always count on the state help. I want to finally add that the procedure of setting up your own business in the UK is incomparably less complicated than in other countries, which is why many people decide to start their own business just in England.

Radek_new

Hey! Nazywam się Radek i na codzień ciężko pracuję w Anglii i myśl, że na emeryturę będę mógł przejść dopiero po 68 latach nie jest mi na rękę. Dlatego udowodnię, że jest to możliwe w wieku 55 lat a może i wcześniej. Zobacz na tym blogu jak chcę to osiągnąć.

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