Doing business in England: what not to forget after setting up a Ltd.

You've decided to do business in the UK market, chosen the right form of business and now you want to make sure you haven't forgotten anything after setting up in the UK? Read on for a summary of the main obligations you may face as a Czech entrepreneur in the UK.

Applying for a visa

The requirement to apply for a visa to do business in England depends on how long you are coming to the UK for and what you will be doing specifically:

• You don't need a visa if you're just setting up an English company and doing business remotely, or if you're coming occasionally for meetings, conferences and similar short-term events - then you're considered an ordinary visitor to the UK;
• you need a visa if you want to do business in person and for a longer period of time in England.

To check whether you need a visa to enter or do business directly in the UK, use the interactive test on the Companies House website (the local 'business register').

For example, if you complete the form step by step, it will:

1. you are from the Czech Republic;
2. you are about to enter the UK for work/business purposes(Work, academic visit or business);
3. you plan to work in England for more than 6 months;
4. the work activity will be to start a business(I want to start a business),

you will find that you need a visa to enter England. You can choose from the following four types:

There are other work visas on offer - the range is really wide and you need to apply for the one that best suits your situation and plans.

Setting up a bank account

If you' ve lived in England for a while, setting up a business bank account won't be difficult. You choose a bank (Barclays, HSBC and Lloyds are the best known), select the type of bank account and provide proof of your status as a foreigner:

• passport or other photo ID;
• a valid visa or residence permit;
• proof that you are living in England (typically a tenancy agreement, utility bill, tax return, etc.).

Non-residents face a more complicated process to open a bank account, so allow extra time. The good news is that UK law does not require Ltd. companies to set up an outright business bank account or an account with an English bank. You can contact your home bank in the Czech Republic if:

• offers a bank account denominated in pounds;
• you separate your company finances from all other finances;
• you obtain a Certificate of Incorporation,Memorandum of Association andArticles of Association for your UK company with an apostille.

Tax registration

Within 14 days of incorporating your UK company, you will also register it for corporation tax. Registration is automatic, based on the instructions that Companies House sends to HM Revenue & Customs (HMRC).

Once registered, you will receive a Unique Taxpayer Reference (UTR), which is a 10-digit unique tax code (similar to the Czech VAT number). This is your proof of identity when communicating with HMRC, submitting forms, accounts or paying corporation tax.

Allocating a UTR does not oblige you to start paying tax immediately, as your business may be dormant for some time after incorporation. However, as soon as you start any business activity, remember to report your UTR as active to HMRC within 3 months.

The rate of corporation tax in England varies according to the amount of annual profits:

• A company with profits up to £50,000 pays 19% tax;
• A company with profits over £250,000 pays 25% tax;
• A firm with profits in between these bands is entitled to partial tax relief on the basic 25% rate.

As a business, you will appreciate that the Czech Republic and the UK still have a double tax treaty after Brexit - so you don't pay tax twice, but either in the UK or the Czech Republic (depending on where you made your profits).

Should your annual turnover exceed the £85,000 threshold, you must register your business with HMRC for VAT. You then file the VAT return itself quarterly. You can also become VAT registered voluntarily.

Mandatory reporting and accounting

Just like Czech companies, English companies are obliged to keep accounts. You must also file Companies House and HMRC returns for your UK company every year (even if your company is idle). The statutory returns are:

• Financial statements;
• tax returns;
• a confirmation statement (a mandatory report verifying key company information).

An interesting feature of the UK market is that companies do not account in the calendar or fiscal year, but in the financial year. This is 12 months from the so-called accounting reference date(ARD), which serves as the starting point for the financial statements. For new companies, this is the last day of the month in which the company was founded.

Recruitment

If you are employing yourself as sole director in your UK business or planning to recruit local staff, don't forget to register for PAYE (Pay As You Earn).

PAYE is used to pay gross payroll tax directly to HMRC, in particular:

• Income Tax;
• employee and employer National Insurance contributions (NICs - similar to our National Insurance and Health Insurance);
• other deductions from employment income.

Once you have employees, you must also take out employers' liability insurance for at least £5 million. This covers you in the event that your employee is injured or becomes ill as a result of the work they do.

We've done the business with Ltd. for you

Language barriers, different legislation and the specific demands of the UK market are not a complication for us. We have many years of experience in setting up Ltd. companies. We can help you get your business up and running in the UK to make sure you meet all the legal requirements.

Get in touch with us using the form below and we will design a tailored solution for you.

Contact information

Write to us and we’ll get back
to you within 24 hours.

+420 226 224 724

info@jake-james.cz

Revoluční 736/15, Praha 1

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