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By laura
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Setting Up a Business in the UK: How do I start?
Are you thinking about setting up a business in the UK? In the following article we suggest a series of steps to follow to help you get started.
Setting up a company in the UK is fairly straightforward process. There are different types of companies depending on the ownership and the activities. Below we will provide you with a series of steps that you may use useful when considering to start a business.
Before we get started, if you are a non-UK citizen, you need to find out if you have the legal right to set up your business. Bureaucratically this changed following the UK’s exit from the European Union. If you are a UK citizen, there is no legal requirement that prevents you.
In the United Kingdom, accountants are the ones who sign and approve the configuration of a company. If you have the financial position, we recommend you to hire one. This professional will accompany you thorough the whole process.
What kind of business do you want to set up? How many people are going to be involved? Where will the economic activity take place?
Before you start, you should be able to answer these questions to be clear about your business’s tax obligations. These will be very different if you are a self-employed or if you decided to set up a company.
If your decision is start working as a self-employed, the process is simpler. You only need to register as a self-employed on the UK’s government website and create a Government Gateway account. From this site you can manage all formalities: dealing with your annual tax return and paying your contribution to your National Insurance. However, if your idea is to set up a company, these obligations and procedures become more complicated.
What steps should you follow to set up a company in the UK?
Decide the name for your company
You need to decided on the name of your company and the address, as they are both legal requirements to register your company at the Companies House. You must complete the application form (IN01), the association memorandum and any other additional information, if our company deals with sensitive content.
Bank account for business in the UK
If your choice is setting up a company, you must register this account with a different name than the person setting it up. We advise you to use this account for business-only, never for personal use.
Most banks in the UK charge a monthly fee for these type of business accounts. It is also possible to sign up to an online bank. Revolut or Wise offer more competitive rates specifically for start-ups.
Pay taxes for business in the UK
You will also have to complete your registration with HRMC (HM Revenue & Customs), to fulfil with corporation taxes. This is a tax rate that all limited companies must pay, based on their profit (currently it is between 19% and 23%) which also coincides with the financial year. It is also with HRMC that you can register for PAYE .This is necessary if you have employees or if you register yourself as a company director, to pay for your own salary.
VAT for business in the UK
In the United Kingdom, not all businesses have to register for VAT (Value Added Tax). If your business exceeds certain amount of turnover, it is another bureaucratic procedure to take into consideration.
Get insurance for your business in the UK
It is extremely important to get insurance for your business activities. Whether you are a self-employed or have decided to set up a company, you should take out insurance to protect your self or your activities from unforeseen events and unexpected costs.