Forming a Company

In order to do business in the UK you may wish to register an existing overseas company or form a new company. In either case, you will need to register with the UK Government’s agency, Companies House, which is responsible for:

  • Incorporating, re-registering, dissolving and striking off companies
  • Registering company information
  • Making company information available to the general public

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Companies House provides guidance on various aspects of company formation and registration, and publishes a series of advisory booklets. Contact:

Companies House
Tel: +44 (0) 303 123 4500
Email: enquiries@companieshouse.gov.uk
Web: https://www.gov.uk/government/organisations/companies-house

Registering an Overseas Company

An overseas company must register with Companies House if it establishes a place of business in Great Britain or habitually conducts business from a particular location in Great Britain. Some types of enterprise, such as partnerships, limited partnerships, unincorporated bodies or government agencies, cannot register in Britain as an overseas company.

An overseas company can register in Great Britain either as a branch or as a place of business. A branch is part of an overseas limited company organised to conduct business through local representatives in Britain rather than referring it abroad.

A place of business applies to a company that cannot register as a branch because it is from within the UK (including Northern Ireland and Gibraltar) or it is not a limited company or its activities in Great Britain are not sufficient to define it as a branch.

Registration must be made within one month of establishing a branch or place of business and the appropriate forms, documents and registration fee must be delivered to the Registrar of Companies at Companies House. Within specified times, the following information will also be required:

  • Details of any mortgages or charges in the UK
  • Copies of accounts

Forming a new company

There are four main types of company in Great Britain:

  • A private company limited by shares
  • A private company limited by guarantee
  • A private unlimited company
  • A public limited company (PLC)

You can either purchase a ready-made company, from a company formation agent, or incorporate a company yourself by sending the appropriate documents and registration fee to Companies House.

In respect of Company Directors, in general anyone can be a company director, with certain exceptions and restrictions relating to factors, such as bankruptcy, disqualification by a court, nationality and age.

Company Taxation

All UK businesses are subject to a tax on their profits, known as Corporation Tax and this includes profits made from the sale of assets (Capital Gains Tax). At the time of writing and according to the UK Government’s inward investment service, the main Corporation Tax rate for a single company is 19%. Further details are available from Her Majesty’s Revenue and Customs (HMRC).

If you set up a branch of an overseas company in the UK, the trading profits of the branch’s activities in the UK will be liable to tax. The rate applied will usually depend on circumstances, and HMRC provide specific advice to individual foreign companies.

HMRC is the UK Government’s agency responsible for taxation and should be consulted for full information and guidance on all such matters. A series of downloadable documents and help sheets is also available.

The Government has published a series of guides for overseas businesses seeking to establish a presence in the country:

Value Added Tax (VAT)

VAT is a charge that you may need to make to your customers if you supply goods or services in the UK or the Isle of Man, or your taxable turnover is above the registration threshold, which at the time of writing is £85,000. The VAT charged to customers is known as output tax.

Once you register for VAT you will be able to claim back any VAT charged to you on business-related goods or services. The VAT paid to suppliers is known as input tax.

Taxable Turnover

Goods and services which are VAT rated are called taxable supplies. The total value of your taxable supplies is your taxable turnover. You will need to register for VAT if at the end of any month your taxable turnover has exceeded £85,000 in the past 12 months or less, or at any time if you expect the value of your taxable supplies to exceed this.

At the time of writing there are three rates of VAT which are as follows:

  • 20% on most goods and services
  • 5% on some goods and services, e.g. children’s car seats and home energy
  • 0% on a range of items, including most food, books, newspapers and children’s clothing

Exempt supplies

Some businesses are not subject to VAT at all. These exempt supplies do not form part of taxable turnover. Examples are:

  • Insurance
  • Postage stamps or services
  • Health services provided by doctors

Voluntary Registration

If your taxable turnover is below the registration threshold, you can apply for voluntary registration. There are both advantages and disadvantages to this. Benefits might include increased credibility for your business and the opportunity to claim back input tax.

HMRC is the Government’s agency responsible for VAT and should be consulted for full details.

Standards & Regulations

The British Standards Institution is the UK’s national standards body and can provide detailed help and advice on all aspects of product compliance in terms of both British and European Standards.

Contact:

British Standards Institution
Tel: +44 (0) 345 080 9000
Email: cservices@bsi-global.com
Web: https://www.bsigroup.com/

The Building Regulations

(For more details of testing, approval and accreditation of building product in the UK, please refer to our separate feature Accreditation, Certification and CE Marking.)

The Building Regulations are a set of minimum requirements designed to secure the health, safety and welfare of people in and around buildings and to conserve fuel and energy in England and Wales. The Regulations apply to most new buildings in England and Wales, and also to extensions, alterations and to change of use of existing buildings. Building Regulations are Statutory Instruments, approved by Parliament and contain essential legislation and guidance for the building and construction industry. In Scotland, The Building Standards (Scotland) Regulations apply and, in Northern Ireland, The Building Regulations NI apply. Full details can be found at:

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