Doing Business in the United Kingdom 

Setting up or expanding your business in the UK is straightforward. You can set up a private limited UK company online in just 24 hours, or register a branch of your existing company in up to four weeks.  In the article, we show the main benefits and options to start a business in the UK.

A. Advantages of Starting a Business in the UK

The UK has a world-class pool of talent and business-friendly employment laws. UK workers benefit from investment in science, technology, and digital training and include graduates of some of the best universities in the world.  Below you can find some of the reasons why companies want to start a business in the UK:

a. Access to talent in the UK

The UK is one of the top European economies for attracting, cultivating, and retaining global talent. The UK has one of Europe’s largest workforce and is internationally renowned for the flexible labour market. 

b. Business-friendly employment laws

The UK’s straightforward and flexible employment laws promote the interests of employees. They also help businesses hire the right people with the right skills. 

c. Top universities and top technical training

The UK has four of the world’s top 10 universities: The University of Oxford, The University of Cambridge, Imperial College London, and University College London. The UK government is establishing a technical education system to rival the best in the world and creating a National Retraining Scheme that focuses on digital and construction training. 

d. Apprenticeships – helping you develop talent

Apprenticeships enable businesses to grow talent and are available in hundreds of occupations across all sectors of the economy, from Level 2 (GCSE- equivalent) right up to degree and masters level. Apprenticeships are a devolved policy. The UK government supports employers with some of the training and assessment costs for apprentices that work at least 50% of their time in England. 

B. Register your business in the UK (Sole traders/ Limited companies/ Partnerships)

What you need to do to set up depends on your type of business, where you work, and whether you take people on to help. 

a. Sole traders

It’s simple to set up as a sole trader, but you’re personally responsible for any losses your business makes. 

 – You need to set up as a sole trader if any of the following apply:  

1. You earned more than £1,000 from self-employment yearly 
2. You need to prove you’re self-employed
3. You want to make voluntary Class 2 National Insurance payments to help you qualify for benefits

– You’ll need to: 

1. Keep records of your business’s sales and expenses
2. Send a self-assessment tax return every year 
3. Pay income tax on your profits and Class 2 and Class 4 National  

– Business names 

Sole trader names must not: 

1. Include ‘limited’, ‘Ltd’, ‘limited liability partnership’, ‘LLP’, ‘public limited company’ or ‘plc’
2. Be offensive
3. Be the same as an existing trademark
4. Your name also cannot contain a ‘sensitive’ word or expression or suggest a connection with government or local authorities, unless you get permission.

b. Limited companies

A limited company is a company ‘limited by shares’ or ‘limited by guarantee’. If you form a limited company, its finances are separate from your personal finances, but there are more reporting and management responsibilities. 

1. Limited by shares

Limited by shares companies are usually businesses that make a profit.  

This means the company: 

– Is legally separate from the people who run it 

– Has separate finances from your personal ones 

– Has shares and shareholders 

– Can keep any profits it makes after paying tax 

2. Limited by guarantee

Limited by guarantee companies are usually ‘not for profit’.  

This means the company: 

– Is legally separate from the people who run it 

– Has separate finances from your personal ones 

– Has guarantors and a ‘guaranteed amount’ 

– Invests profits it makes back into the company 

c. Partnerships

A partnership is the simplest way for 2 or more people to run a business together. 

You share responsibility for your business’s debts. You also have accounting responsibilities.  

In a partnership, you and your partner (or partners) personally share responsibility for your business. This includes:  

– Any losses your business makes 

– Bills for things you buy for your business, like stock or equipment 

– Partners share the business’s profits, and each partner pays tax on their share.  

*A partner does not have to be an actual person.  

There are different rules for limited partnerships and limited liability partnerships (LLPs).

C. PEO Service in UK

Professional Employer Organization(PEO) service makes market entry into the United Kingdom streamlined and simple. You don’t need to have a legal entity to do your business internationally. You can partner with NNRoad for further expansion.

Read more about how a PEO in the UK can help you to expand in the country

a. Expenses and benefits for employers

If you’re an employer and provide expenses or benefits to employees or directors, at the end of the tax year you’ll usually need to submit a P11D form to HM Revenue and Customs (HMRC) for each employee you’ve provided with expenses or benefits. 

You’ll also need to submit a P11D(b) form if: 

– You’ve submitted any P11D forms 

– You’ve paid employees’ expenses or benefits through your payroll 

– HMRC have asked you to – either by sending you a form or an email 

– Your P11D(b) tells HMRC how much Class 1A National Insurance you need to pay on all the expenses and benefits you’ve provided. 

If HMRC has asked you to submit a P11D(b), you can tell them you do not owe Class 1A National Insurance by completing a declaration. 

b. Employment Allowance

Employment Allowance allows eligible employers to reduce their annual National Insurance liability by up to £4,000. You’ll pay fewer employers’ Class 1 National Insurance each time you run your payroll until the £4,000 has gone or the tax year ends (whichever is sooner). 

You can only claim against your employers’ Class 1 National Insurance liability up to a maximum of £4,000 each tax year. You can still claim the allowance if your liability was less than £4,000 a year.

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