HOW TO SET UP YOUR BUSINESS IN LONDON - V-Next

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HOW TO SET UP YOUR BUSINESS IN LONDON - V-Next
HOW TO
SET UP YOUR
BUSINESS IN
LONDON

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HOW TO SET UP YOUR BUSINESS IN LONDON - V-Next
About this guide                              CONTENTS
This guide is published by London
& Partners, the official international
trade, investment and promotion
agency for London.

Inside you’ll find:
                                                  1   Welcome to London
                                                      About London & Partners
                                                      Why London?
                                                                                04

Essential steps

                                                  2                             12
Things you must do when setting up a                  Forming a UK entity
business in London.                                   How to get started
                                                      Choosing a legal entity
Guidance from our                                     Guide to taxation
professional partners                                 VAT
Expert insights on tax, property,                     Tax incentives
finance, legislation, recruitment, R&D,               Intellectual property
intellectual property and more.

                                                  3
Living in London
                                                      Practical Steps           26
Information on accommodation,
                                                      Visas and immigration
schools and getting around the city.
                                                      Opening a bank account
                                                      Building your team
                                                      Setting up your office

  “                                               4   Launch and grow
                                                      Planning for success
                                                      How to sell in the UK
                                                                                48

London & Partners were                                Promoting your business
                                                      Networking
an incredible source
of knowledge and
support for our business
expansion.
                                                  5   Enjoy London life
                                                      Tips for relocating
                                                      Schools
                                                                                54

                                                      Time off and time out
                                                      Transport around London

Nick Keating, Director
EMEA, BounceX

                                          2   3
HOW TO SET UP YOUR BUSINESS IN LONDON - V-Next
1
WELCOME
TO LONDON
A world-class city in which to live, work
and build a global business.

As CEO of London & Partners, I’d like to thank you for       Our vast network of expert and experienced professionals
considering London.                                          can advise and guide you on every aspect of locating and
                                                             doing business here.
Whether a growing startup or an established organisation,
you are joining a business ecosystem that’s diverse,         From advice on setting up your legal entity and UK taxation,
innovative and full of exceptional talent.                   to practical guidance on visas, building your team or finding
                                                             a well-priced office, this guide is designed to give your
Since 2011, our team has guided more than 2000 companies     business a head start in this market.
like yours from more than 67 countries to set up and scale
their businesses.                                            We look forward to supporting you on your journey to set up
                                                             and succeed in London.

                                                                                    Laura Citron
                                                                                    CEO
                                                                                    London & Partners

                                         4
HOW TO SET UP YOUR BUSINESS IN LONDON - V-Next
ABOUT                                                          We have helped

LONDON &                                                       2000+
                                                               companies set
                                                               up operations

PARTNERS                                                       in London
                                                               since 2010

London & Partners provides international
businesses with the information they need
to take advantage of London’s unrivalled
opportunities from day one.

Our team in London and around the world would be delighted
to support you.                                                  “
Free of charge, bespoke and confidential services include:     London & Partners have
• Building the business case for London.                       been an invaluable source
                                                               of support and guidance to
• Sector-specific information, contacts and event calendars.
•	Access to high-quality banking, accounting, legal and
   immigration advice through our accredited professional      ChargePoint in the months
   service providers.
• Finding the best property in the right locations.            following our establishment
• Advice on relocation and discounted desk hire.
•	Help finding the best people from London’s huge pool of
                                                               as a UK company and we
   talent and skills.                                          will continue to work with
• Connecting companies to London’s business networks.
•	Information on living in London and making the most         them to help promote our
   of the city.                                                offering to new audiences.
Contact us to see how we can help:
                                                               Tanya Sinclair
business@londonandpartners.com
business.london
                                                               Policy Director UK & Ireland, ChargePoint

                                         6
HOW TO SET UP YOUR BUSINESS IN LONDON - V-Next
London is one of the world’s most exciting, dynamic and profitable cities in
             which to establish a business.

                  1                                                        6
                                EXCEPTIONAL BUSINESS
                                ENVIRONMENT                                          WORLD-LEADING

             The UK ranks consistently in the top 10 in the             London is home to 64,000 financial and
             world for ease of doing business.1                         professional service firms, the highest
                                                                        concentration of any financial centre in the world.5

                 2
                                LOW TAXATION

                                                                           7
                                ECONOMY
                                                                                     CONNECTIVITY
             Corporation tax at 19% – the lowest in the G20.
                                                                        With the Eurostar, six international airports and
                                                                        direct flights to 326 destinations6, London is one
                                                                        of the world’s best-connected cities

                 3
                                EXPERTISE
                                AND TALENT

10 REASONS   The capital has more software developers than
             any other European city2 and has four of the                  8          TIME ZONE ADVANTAGE

 TO SET UP   world’s top 40 universities.3
                                                                        Waking hours overlap with both Asia and North
                                                                        America, so staying in touch is easy.

IN LONDON        4
                                RESEARCH
                                AND DEVELOPMENT

             SMEs can receive up to 33% of qualifying expenditure
             as tax credits and the Patent Box scheme enables a
                                                                           9          ACCESS TO FINANCE

             Corporation Tax rate of 10% to profits earned from a       VC funding into London reached a record $9.7bn
             company’s patented inventions.                             in 2019, and over the last five years the UK has
                                                                        created more than double the number unicorns
                                                                        than any other European country 7.

                 5              TECH CITY

             London and the south-east make up the largest
                                                                         10          QUALITY OF LIFE

             tech ecosystem in Europe, with an estimated value          A world-class cultural offering with 3,530+
             of $47bn.4                                                 pubs, 857 art galleries, 215 museums,
                                                                        eight Royal Parks and four UNESCO World
             1
               The World Bank                                           Heritage sites.
             2
               The State of European Tech
             3
               QS World University Rankings
             4
               BDO
             5
               UK FinTech, State of the Nation
             6
               fDi Benchmarks
             7
               Dealroom.co

    8                                                               9
HOW TO SET UP YOUR BUSINESS IN LONDON - V-Next
WHY
          LONDON?
     A comment from Stuart Lisle, Partner at BDO

     The world is going through a period of immense             London is globally recognised as an international hub
     change. Developments in technology and                     of finance, but it caters for all sectors of business.
     regulation, a changing relationship with the EU and        London has innovative manufacturers, pioneering
     the increasing pace of globalisation means that            digital startups and forward-thinking retailers. Why?
     uncertainty is now the “new normal”. But with              Because as well as being a business-friendly city and
     uncertainty there is also opportunity.                     home to world leading entrepreneurs it is also a
                                                                fantastic place to live and to study.
     London is undoubtedly the best city in the world to
     realise that opportunity. London remains                   London offers one of the most business-friendly fiscal
     entrepreneurial, outward looking and full of               environments in the world, with the lowest corporate
     creativity and possibility. The strength of London is      tax rate in the G20, one of the widest tax treaty
     its diversity – a diversity of cultures, of ideas and of   networks of any country and lowest social security
     businesses. Diversity is the lifeblood of the city and     costs in western Europe. Add to this its business-
     that won’t change.                                         friendly labour laws, the UK will continue to be the one
                                                                of the best global locations for setting up for
                                                                international businesses.

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HOW TO SET UP YOUR BUSINESS IN LONDON - V-Next
INVESTOR
         INSIGHTS

     Innovation capital                                                      Access to talent

     “One of the strongest regions and cities on the planet. It’s highly     “The access to talent in London is second to none in
     attractive and it offers one of the best prospects for business         its diversity, meaning we can find and foster the best
     development and innovative thinking. London is the showcase for         talent whether we’re looking for artists, producers
     our work throughout Europe and is paramount in our global strategy.”    or creatives.”

     Jeff Brennan,                                                           Mike McGee,
     Chief Privacy Officer, Finsphere Corporation                            Chief Creative Officer and Co-Founder, Framestore

     Business-friendly                                                       Fast-track business growth

     “London is very easy to work in and is a very business-friendly city.   “In terms of regulation, London is a walk in the park.
     The process was a lot less complex than we expected. It took just       Coming to London was so much easier compared
     six months from the initial idea to opening the office.”                to other cities. We had a lot of support from London
                                                                             & Partners – what normally takes months took
     Will Fleming,                                                           one week.”
     President and CEO, MotionPoint
                                                                             Surobhi Das,
                                                                             COO, Zomato

     Commerce and culture combined

     “London has an unbelievable energy, thanks to its incredible mix of
     commerce, culture and people. If you want to grow outside the
     United States you’ve got to come to London.”

     Shimon Bokovza,
     Founder and CEO, SushiSamba

     Capital, clients and people

     “Our decision to expand to London was based on three classic
     elements: access to capital, access to clients and access to people.”

     Ben Chesser,
     CEO, Coniq

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HOW TO SET UP YOUR BUSINESS IN LONDON - V-Next
2
FORMING
A UK ENTITY

HOW TO GET STARTED             14
CHOOSING A LEGAL ENTITY        16

GUIDE TO UK TAXATION           18

VAT                            20

TAX INCENTIVES                 24

INTELLECTUAL PROPERTY          27

                          14        15
HOW TO SET UP YOUR BUSINESS IN LONDON - V-Next
Tim Stovold, Head of Tax at Moore                                          3. Talk to banks early
                                                                                     Do not underestimate the time it will take to open a bank
          Kingston Smith, walks you through                                          account, especially if your business has a complex ownership
          five steps for establishing your                                           structure outside the UK and/or the relevant people are
          business in the UK.                                                        constantly travelling. If you have relationships with banks in
                                                                                     your home country that are represented in the UK, this would
                                                                                     be an easy place to start. Start the process as soon as your
                                                                                     entity is formed.

                                                                                     4. Register your seconded employees
                                                                                     HM Revenue & Customs (HMRC) is the UK tax authority that
                                                                                     collects taxes. Your seconded employees will require either a
                                                                                     UK social security number (known as national insurance
                                                                                     number) or a unique tax reference. They must apply for these
                                                                                     reference numbers as soon as they arrive in the UK to avoid
                                                                                     delays and mistakes later on.

                                                                                     5. Plan ahead

  HOW
                                                                                     Establish a calendar of compliance activities for your UK entity
                                                                                     and plan whether to handle them in-house or outsource them.
                                                                                     UK tax has monthly, quarterly and annual obligations to be
                                                                                     met. Evidence that you are tax-compliant is increasingly

 TO GET                                                                              required in tenders and therefore essential for your business
                                                                                     to have the greatest chance of success in the UK.

STARTED
          1. Think about your structure
          You will probably find that a UK limited company will be the
          right entity. Alternatively, if you are intending to carry out more
          than one type of activity in the UK or need to ring-fence real
          estate or intellectual property from risk-bearing trading
          activities, you might want to consider a holding company with
          multiple subsidiaries. Another option is registering your
          business as a branch, known as a UK establishment.

          2. Get registered and insured
          When applying for immigration permission, you will need tax
          registration and insurance documents to prove you are a
          genuine UK business.

          i)	Register for a payroll scheme so you can make tax
               deductions at source from payments you make to
               your employees;
          ii)	Register for value-added tax (VAT) so you can recover
               VAT on your expenses and charge VAT (where applicable)
               on your sales invoices;
          iii)	Arrange £5m of employers’ liability insurance so you
               are covered for any compensation claims brought
               by employees.

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HOW TO SET UP YOUR BUSINESS IN LONDON - V-Next
CHOOSING A
     LEGAL ENTITY
When establishing a business in London, you need to set up a legal entity.
Andrew Oury, Partner at Oury Clark, takes you through the options.

There are various ways to trade in the UK and the most common types are:

  UK limited company

A limited liability company structure owned by shareholders and run by its directors.

Pros                                                                   Cons
• Quick and inexpensive to set up.                                     • Tax losses stay in the UK.
•	Robust limited liability protecting directors                       •	An audit may be required based on the size of the
   and shareholders.                                                      worldwide group.
• Well recognised and understood.                                      • Information on directors publicly available.
• No need for directors or shareholders to be UK resident.             •	Requirements to publicly disclose all persons of
• No minimum share capital, and only one director required.               significant influence.
• UK Corporation Tax at 19%.
• Access to generous UK R&D incentives.
• Compatible with EIS and SEIS.
• Management and ownership can be separate.
•	Can be used for an Innovator visa, Tier 2 visa sponsor
   and a Representative of Overseas Business visa.
                                                                                                                                        UK establishment (branch)

                                                                                                                                      A UK establishment is the place of business or branch of an overseas company within the UK. Effectively, it’s a direct extension
                                                                                                                                      of the overseas company, officially registered at Companies House and the tax authorities to trade. Financial reports of the
                                                                                                                                      parent company are likely to be filed in the UK annually.
  Limited liability partnership

A partnership but the liability of the members is limited.                                                                            Pros                                                                   Cons
                                                                                                                                      •	Enables the direct offset of costs in the parent company            •	Part of the parent without separate limited liability thereby
Pros                                                                   Cons                                                              jurisdiction, and can mean that losses can be claimed in               exposing the whole business to the UK risks.
• Easy to set up.                                                      •	Not as well recognised or understood as a                      a foreign country.                                                  •	It is likely the group accounts would need to be filed
• Transparent for tax.                                                    limited company.                                            •	Part of the parent and therefore could in theory give better           publicly with Companies House, even if they are not filed
• Flexible for profit distributions.                                   • Needs at least two people or companies to set one up.           credit terms than a newly incorporated company.                        at home.
• Can be useful for ensuring efficient repatriation of profits.        •	Members all have to file UK tax returns and pay UK tax on   •	Compatible with EIS and SEIS if establishment is with               •	Cannot take advantage of the low UK rate of 19% if
• Can be used for an Innovator visa and a Tier 2 visa sponsor.            profits derived from UK activities.                            the holding company of the overseas company.                           the parent company jurisdiction has a higher rate of
                                                                       • Very limited access to R&D incentives.                       • No audit required.                                                      Corporation Tax.
                                                                       •	Cannot be used for a Representative of an Overseas          •	Can be a Tier 2 visa sponsor and a Representative of                • Unlikely to work under an Innovator visa.
                                                                          Business visa.                                                 an Overseas Business visa.                                          • Can be seen as temporary or early stage activities.
                                                                                                                                      •	May enable parent company to claim R&D relief in the                •	Cannot be used for a Representative of an
                                                                                                                                         UK depending on branch activity.                                       Overseas Business visa.

                                                                  18                                                                                                                                    19
GUIDE TO           Which taxes should you be aware of, what rates should you pay and
                   what are your obligations? James Dolan, Partner at Blick Rothenberg,
UK TAXATION        covers the essentials.

                   Corporation Tax                              Income Tax                                  National Insurance
                   Corporation Tax is the tax levied on a       Income Tax (and National Insurance as       Contributions (NICs)
                   company’s profits. UK resident compa-        outlined below) is generally deducted       NICs is the UK’s social security
                   nies are subject to Corporation Tax in       from an employee’s salary on a monthly      mechanism.
                   the United Kingdom on their worldwide        basis, through an employer-run system
                   taxable profits (subject to an option to     known as “Pay As You Earn” (PAYE), and      Both employers and employees are
                   exempt profits of non-UK branches).          paid monthly to HMRC.                       subject to NICs as a percentage of the
                   Furthermore, an overseas entity trading                                                  gross salary paid to an employee.
                   in the UK through a UK branch or
                   “permanent establishment” is subject to      How much?
                   Corporation Tax on profits relating to       For the tax year beginning 6 April 2019,    How do I calculate NICs?
                   UK activities.                               a UK employee will pay 0%, 20% , 40%        As an employer, you must calculate this
                                                                or 45% income tax, depending on their       amount for both your workforce and the
                   A UK company needs to register with          earnings. The tax is paid on a “slice”      company and pay it to HMRC on a
                   the UK tax authorities, HM Revenue &         basis, so individuals can usually receive   monthly basis, along with income tax.
                   Customs (HMRC), and prepare a                the benefit of their tax-free personal      Current rates for employees are 12% of
                   Corporation Tax Return and tax compu-        allowance before they begin to pay tax      their salary between £166 and £962 per
                   tation each year based on its annual         at higher rates.                            week, and then a further 2% on income
                   statutory accounts. This is filed with                                                   above that limit.
                   HMRC. Similar obligations apply to UK
                   branches of foreign companies.               Employer responsibilities                   For employers, the rate is 13.8% of a
                                                                As an employer, it’s important that you     total salary above £166 per week. This is
                   How much?                                    calculate income tax liabilities for your   a cost that should be factored into
                   Corporation Tax is paid on the tax           UK workforce and any overseas               budgeting for UK staff in addition to
                   adjusted profits the UK business makes.      workers you are hosting, taking into        basic salary and any benefits provided.
                   The rate of Corporation Tax in the UK        account items such as workplace             In certain circumstances, overseas
                   is 19%. Special rates of Corporation Tax     pensions, social security and any           nationals may be exempt from paying
                   can apply to companies in the oil            benefits provided.                          UK National Insurance; however, it’s
                   and gas, banking/insurance or                                                            important to seek advice to ensure the
                   shipping sectors.                                                                        correct approach.
                                                                How much income tax
                                                                will you pay?
                   Who works it out?                            Depending on your circumstances, for
                   UK companies are required to calculate       the tax year beginning 6 April 2019 the
                   their own tax liability and file an annual   first £12,500 (personal allowance) of
                   Corporation Tax return on a self-assess-     earnings are tax free. The next £37,500
                   ment basis. Payment of Corporation Tax       is taxed at the basic rate of 20%. The
                   may also be due on an instalment basis       higher rate of 40% applies to taxable
                   for larger groups. It is important to seek   income between £50,001 and £150,000,
                   advice early on regarding the most           after which the additional rate of 45%
                   appropriate trading model to adopt in        applies. Note that if an individual’s
                   the UK. For example, whether the UK          income exceeds £100,000, their
                   company should be a service provider         personal allowance is tapered away
                   to the overseas parent company or            at £1 for each £2 over this limit.
                   whether the UK company will directly
                   enter into contracts with customers.
                   These factors can influence the level of
                   taxable profits in the UK company.

              20                                                                    21
VALUE
     ADDED TAX (VAT)
     David McDonnell, Indirect Tax Director at RSM, provides a quick
     guide to Value Added Tax (VAT).

     What is VAT?                                Who needs to pay VAT                        cumulatively exceed the VAT registra-
                                                                                             tion threshold, this may also create a
     It’s a consumption tax on goods and         and when?
     services in the UK and European Union,                                                  requirement to register for UK VAT.
                                                 The time at which a VAT registration is
     with different member states having         required will depend on several reasons
     different levels of VAT. All companies      such as whether the registration is for a   Further information
     that transact with customers or suppliers   UK entity and/or subsidiary or for a        You should seek expert advice to make
     within the EU will need to understand       non-established trader. A non-estab-        sure that you are paying the correct rate
     these levies, even if they do not have a    lished trader can take many forms, eg, a    of VAT and if your supplies will be
     European presence.                          business that does not have a place of      treated as VAT-taxable supplies of
                                                 business in the UK, usually a business      goods or services. Furthermore,
                                                 that is supplying goods from its local      penalties can be levied by HMRC for not
     What is the VAT rate in the UK?             country to consumers in the UK.             registering at the correct time, for
     The VAT rate applicable depends upon                                                    claiming VAT incorrectly or not account-
     the goods or services you supply,           If the annual VAT-taxable turnover of       ing for VAT correctly on sales.
     although certain goods or services are      your UK business (via a subsidiary)
     exempt from VAT and therefore may not       exceeds £85,000 per year, you are
     count towards the VAT registration          required to register with HMRC and
     thresholds.                                 charge your UK customers VAT on all
                                                 sales. The tax should then be paid to
     The standard rate in the UK is currently    the UK tax authorities (Her Majesty’s
     20% and is applied to most taxable          Revenue & Customs or HMRC) on a
     goods or services. A reduced rate (5%)      periodic basis, usually each quarter.
     or a rate of 0% can apply. You may also     For a non-established trader selling
     be charged UK VAT on goods and              goods to UK customers, the threshold is
     services that are supplied to you, but if   zero; therefore, there will be a mandato-
     you are a UK VAT registered business        ry requirement to register for UK VAT
     you can recover these payments by           before the first sale takes place.
     paying (or reclaiming) the net amount       If a UK business receives certain
     via your next VAT return.                   services from non-UK suppliers that

22                                                                  23
TAX INCENTIVES                                                                                                                                      “
Eyad Hamouieh, Innovation Incentives Tax Partner at BDO, explains the                                                                            There’s a misconception that
range of options available to support businesses looking to invest in                                                                            R&D only applies to those that
innovation within the UK.                                                                                                                        wear “white-coats” or businesses
                                                                                                                                                 engaged in pharmaceuticals,
Research and development (R&D) tax credits                                Creative sector tax reliefs                                            technology or manufacturing.
There is a lot of terminology around R&D tax relief, but don’t            The creative industry plays an increasingly significant role in
be put off.                                                               the UK economy. The government has introduced eight                    In reality, R&D tax relief looks to
                                                                          targeted tax credits designed to encourage development and
R&D can be costly, but the UK has some of the most effective              production activities in the UK. These can result in a cash            incentivise the improvement of
                                                                                                                                                 products and processes as much
tax reliefs available in the form of R&D tax credits. There are           refund of up to 20% of eligible expenditure.
two R&D tax credit schemes in the UK:

•	SME scheme: delivers between 26% to 33% of qualifying
                                                                          The tax credits are:
                                                                                                                                                 as blue sky thinking – and doesn’t
   expenditure as refundable tax credits
•	Large company scheme (RDEC): delivers a 12% boost to
                                                                          •
                                                                          •
                                                                              Film Tax Relief (FTR)
                                                                              Animation Tax Relief (ATR)
                                                                                                                                                 only apply to projects that are
   earnings before tax, in the form of a taxable above the line           •   High-end Television Tax Relief (HTR)                               completed successfully.
   tax credit. This equates to a circa 10% net tax benefit, which         •   Children’s Television Tax Relief (CTR)
   is repayable in cash where a company is loss-making.                   •   Video Games Tax Relief (VGTR)
                                                                          •   Theatre Tax Relief (TTR)
Qualifying for these schemes can be challenging, especially if            •   Orchestra Tax Relief (OTR)
your group structure is complex. However, we can help you                 •   Museums and Galleries Exhibition Tax Relief (MGETR).
navigate through this – our expertise in the legislation,
underlying guidance and HMRC interpretation and how it
applies to companies of all sizes is invaluable.                          Employee share plans and incentives
                                                                          Retaining and incentivising your people is an important
There’s a misconception that R&D only applies to those that               objective for most employers and companies. Structuring your
wear “white-coats” or businesses engaged in pharmaceuti-                  cash and share-based incentive arrangements to achieve that
cals, technology or manufacturing.                                        goal as effectively and efficiently as possible will give you a
                                                                          competitive advantage.
In reality, R&D tax relief looks to incentivise the improvement of
products and processes as much as blue sky thinking – and                 How you approach this challenge will vary depending on your
doesn’t only apply to projects that are completed successfully.           business’s current stage of development and strategy for
                                                                          growth – so it’s vital to take advice on the most appropriate
                                                                          scheme for your business.
The Patent Box
The Patent Box scheme is available to companies earning
profits from goods and/or services that have been patented in
the UK or with the European Patent Office. It takes the form of
a lower effective tax rate at 10% of the relevant profits.

The rules may seem complicated at first, however the
calculation need not be, particularly with a little bit of upfront
planning and with the support of expert advisers.

                                                                     24                                                                     25
A QUICK GUIDE
                                                                  INTELLECTUAL PROPERTY
TO PATENT BOX                                                     RIGHTS IN THE UK
A scheme allowing companies to apply a 10% rate of
Corporation Tax to profits attributable to qualifying patents,    Mark Owen, Partner, IP and Media at Taylor Wessing, provides a quick
whether realised as royalties or embedded in the sale             essential guide to intellectual property rights in the UK.
price of products.

Who?
A broad range of sectors, including electronics, defence,
pharmaceuticals, life sciences and manufacturing can benefit.     There are several forms of intellectual property rights (IPRs), which can protect a wide variety of different creations including
                                                                  as brand names, logos, inventions, designs, text or images. The main forms of IPRs in the UK are:
Why?
To incentivise companies to retain and commercialise                Form of protection                              Examples of what can be protected           Duration
existing patents and to develop new, innovative patented
products.                                                              Registered                                    Your brand names, business names,           10 years, but can be renewed
                                                                       trademarks*                                   domain names, social media handles,         potentially indefinitely.
And not forgetting…                                                                                                  logo and product names (but also,
The regime also applies to some other IP rights such as plant                                                        potentially packaging, colours, shapes
variety rights, regulatory exclusivity rights and supplementary                                                      and the like).
protection certificates (SPCs).
                                                                       Rights in passing-off                         Your brand names, domain names, social      Potentially indefinitely.
Visit hmrc.gov.uk to find out more.
                                                                                                                     media handles, goodwill and reputation,
                                                                                                                     including packaging.

                                                                       Registered* and                               Packaging, the whole or part of a           Generally 3 to 25 years depending
                                                                       unregistered designs                          product, 3D shape or configuration,         on which form of design.
                                                                                                                     product shapes, graphic designs and
                                                                                                                     surface decoration.

                                                                       Copyright and                                 Investment in databases, text (such         Generally 70 years from the
                                                                       database rights                               as product descriptions), images,           death of the creator.
                                                                                                                     pictures and drawings (such as design
                                                                                                                     documents, marketing materials and
                                                                                                                     product packaging), films, music and
                                                                                                                     software, consumer and sales details.

                                                                       Patents*                                      Inventions. Ones which are essentially a    20 years.
                                                                                                                     business model are harder to protect.

                                                                       Confidential                                  Any commercially sensitive information      Potentially indefinitely.
                                                                       information                                   such as customer or supplier
                                                                                                                     information, know-how, manufacturing
                                                                                                                     processes and product launches.

                                                                  *Registration is required for a right to arise.

                                                             26                                                                                  27
3
PRACTICAL
STEPS

VISAS AND IMMIGRATION                  32

OPENING A BANK ACCOUNT                 35

RECRUITING AND RETAINING TALENT        36

SETTING UP YOUR OFFICE                 41

                                  28        29
GUIDE TO
          UK VISAS
     Tom Redfern from Redfern Legal explains how to identify the right UK
     visa for your type of business and what you want to achieve.

     Consider the options early on to avoid       If you’re a more experienced entrepre-
     surprises and to ensure choices down         neur with an innovative, viable, scalable
     the line, such as residence, are not         business idea and have access to at least
     ruled out.                                   £50,000, try the Innovator visa route.

                                                  The Tier 1 Global Talent visa (previously
     Leaving the EU
                                                  the Exceptional Talent visa) is for
     Once the UK leaves the transition
                                                  people with the required talent level and
     period as a result of its departure from
                                                  is also one of the self-employed routes.
     the EU, it will automatically leave the
     European Economic Area (EEA). Until
                                                  For hiring outside the EEA, make sure
     this happens (currently scheduled for 31
                                                  your UK company has a sponsor licence.
     December 2020), the rights of EEA
                                                  These applications fall under Tier 2, an
     nationals remain unchanged. There is a
                                                  employed route. Your business will need
     pre-settled and settled registration
                                                  to show it has a UK bank account, and
     scheme in place for EU nationals to
                                                  due to money laundering checks expect a
     preserve their residence status in the
                                                  four to eight-week preparation time for
     UK once the transition period ends. It’s
                                                  your application.
     simple and free of charge.
                                                  The sponsor licence comes with different
     Visa types                                   sub-categories – the ones commonly
     A standard visitor visa allows you to        used when hiring non-EEA employees are
     come here for a business activity, but it    the Tier 2 General and Tier 2 Intra-Com-
     does not allow you to work. There can        pany Transfer (ICT) categories.
     be a grey area between the two.
     If you are a company based overseas          Tier 2 visa applications include an NHS
     with no UK presence, you can expand          surcharge and a skills charge. Contribu-
     your business here by sending a senior       tions are also payable by the employer.
     employee to establish a registered           However, secondees from outside of the
     branch or wholly owned subsidiary of         UK may be eligible for an exemption of
     the overseas business through the Sole       between one and five years of National
     Representative visa.                         Insurance contributions. Application for a
                                                  certificate of coverage may be needed
     If you’re an early-stage high potential      from the home country, so leave plenty of
     entrepreneur who is starting a business      time for this.
     in the UK for the first time, consider the
     Start-up visa.

30                                                                   31
DECISION MAKER: WHICH VISA?
Anita de Atouguia, Partner and Head of Business Immigration at Doyle Clayton,
runs through the options
          Visa type                                                     Ideal for…                                                                                      Applicants must…                                                            Resulting in…                                                       Don’t forget…                                                How long to organise?
  Sole representative visa              Established senior employees who are not majority                                     If using your own money which is transferrable to the UK to invest, you must show:                       A 3-year visa, extendable by a further 2          You must meet the English language requirement and work full                        Standard processing time is 2 to 4 weeks from
                                        shareholders, to set up a UK branch or a wholly-owned                                 - how much money you have and where it’s being held;                                                     years.                                            time for that employer only in the UK (personal and business travel is              the date of the application.
                                        subsidiary for an overseas parent company whose                                       - where the money came from if held for less than 2 consecutive years prior to                           Permanent residency after                         permitted).                                                                         Use the priority service option (if available) and
                                        headquarters and principal place of business is outside                               application; and                                                                                         5 years’ continuous stay.                         A business plan for the UK expansion is required.                                   receive an outcome within 3 to 5 working days.
                                        the UK.
                                                                                                                              - supply evidence of the source of funds.

                                                                                                                              If using money that is owned either jointly with, or solely by, your husband, wife, civil
                                                                                                                              partner, unmarried or same-sex partner, you must:
                                                                                                                              - have unrestricted right to transfer and dispose of the money;
                                                                                                                              - have permission from your husband, wife, civil partner, unmarried or same-sex partner
                                                                                                                              to have control of this money in the UK; and
                                                                                                                              - supply evidence of your relationship plus permission to use the joint funds given.
  Tier 2 visas for                      • Sponsored visa for skilled workers.                                                                                                                                                                                                                                                                                                The business must be established and
  sponsored workers                     • You’ll need a sponsorship licence from UK Visa & Immigration.                                                                                                                                                                                                                                                                      trading first.
  (overview)                            • There are minimum skill and salary levels required for all Tier 2 visas .                                                                                                                                                                                                                                                          Licence should be granted (if the application is
                                        • You may need to undertake a Resident Labour Market Test (RLMT) for Tier 2 (General) visas.                                                                                                                                                                                                                                         successful) within 2 to 6 weeks from the date
                                                                                                                                                                                                                                                                                                                                                                             the application is made, but may take longer if
                                        • A cooling-off period of 12 months may apply at the end of a Tier 2 visa or UK assignment, preventing the migrant from returning to the UK as a Tier                                                                                                                                                                               the business receives a pre-licence audit from
                                           2 migrant for 12 months (exceptions apply for high earners and for assignments that are less than 3 months).                                                                                                                                                                                                                      the UK Home Office. Once the sponsor licence
                                        • In addition to government application fees, applicants may also have to pay a mandatory upfront contribution to the National Health Service, which                                                                                                                                                                                has been granted, the migrant’s visa must be
                                           is currently set at £400 per person, per year of the visa.                                                                                                                                                                                                                                                                        applied for. So, total timings are likely to be 3
                                        • Sponsors must also pay an “Immigration Skills Charge” at the rate of £1,000 per year of the Tier 2 Visa (reduced to £364 for small and charitable                                                                                                                                                                                 to 6 months.
                                           sponsors). Certain exemptions apply, such as for the hire of UK graduates switching into Tier 2.
  Tier 2 Intra Company                  (Transferring skilled overseas-based non-EU employees                                 The migrant must be paid at least £41,500 gross per year for the long-term staff sub-                    For the long-term staff sub-category, visa        For the long-term staff sub-category, after a maximum of 5 years (or 9 years if     Standard processing time is 2 to 4 weeks from
  Transfers (ICT):                      from overseas group companies to your UK operation.)                                  category (£23,000 gross per year for Graduate Trainee), or the market rate for the role                  of up to 5 years in total (or 9 years if annual   annual salary package is at least £120,000), the employee must leave the UK         the date of the application (but a sponsor licence
  - Long-term staff                     The migrant must have been employed for 12 months in the                              if higher (as dictated by the relevant Code of Practice for Skilled Workers).                            gross salary package is at least £120,000).       as a cooling-off (lock-out) period of 12 months will apply. The same applies for    must be in place first).
  - Graduate trainee                    overseas company to be eligible for a long-term staff visa,                                                                                                                                    Maximum granted for a graduate trainee is         graduate trainees unless returning under the Tier 2 ICT long-term staff route.      Use the priority service option (if available) and
                                        unless earn at least £73,900 gross per year.                                                                                                                                                   12 months.                                        There is no English language requirement.                                           receive an outcome within 3 to 5 working days.
                                        The migrant must have been employed for 3 months to be                                                                                                                                         NB: ICT route does not lead to permanent                                                                                              24-hour processing is available in certain limited
                                        eligible for a Graduate Trainee visa.                                                                                                                                                          residency.                                                                                                                            countries, eg in China and the USA.
  Tier 2 General                        Usually for hiring of skilled non-EU staff from outside                               The migrant must be paid a minimum gross salary package of £30,000 gross per year                        Permission capped at 6 years (3- years visa       The migrant must meet the English language requirement.                             Standard processing time is 2 to 4 weeks from
                                        your “employing group” (eg new hires from abroad or                                   (experienced workers) or £20,800 gross per year (new entrants) or the market rate for                    initially with a 3-year extension).               Applicants must not own more than 10% of the business (unless gross annual          the date of the application (but a sponsor licence
                                        recruits from other UK businesses currently on Tier 2 visas                           the role, if higher (as dictated by the relevant Code of Practice for Skilled Workers).                  Leads to permanent residency after 5 years        salary package is at least £159,600).                                               must be in place first).
                                        with another sponsor), but can also use for current staff                                                                                                                                      if certain conditions are met.                    The migrant’s UK company may need to advertise the role for at least 28 days        Use the priority service option (if available) and
                                        relocating permanently to the UK.                                                                                                                                                                                                                and the migrant may need to apply for permission to recruit against the UK’s        receive an outcome within 3 to 5 working days.
                                                                                                                                                                                                                                                                                         immigration cap (currently set at 20,700 per year), unless an exemption applies,    24-hour processing is available in certain limited
                                                                                                                                                                                                                                                                                         before offering it to a non-EU national.                                            countries, eg China and the USA.
                                                                                                                                                                                                                                                                                         RLMT must be carried out unless it is a shortage occupation, or the gross
                                                                                                                                                                                                                                                                                         annual salary package is £159,600 per year or more.
                                                                                                                                                                                                                                                                                         12-month cooling off period applies unless returning as a high earner with
                                                                                                                                                                                                                                                                                         annual gross salary package of at least £159,600.
  Start-up visa (formerly               Early-stage, high potential entrepreneurs starting a                                  You do not need any funds to invest in the business at this stage and must not have                      A 2-year visa that cannot be extended             You must meet the English language requirement, as well as providing                Up to 3 months, depending on timing of the
  known as Tier 1                       business in the UK for the first time, which has been                                 previously set up a business in the UK.                                                                  further in this category.                         evidence of prescribed personal maintenance funds                                   endorsement.
  Graduate Entrepreneur                 endorsed by an approved body.                                                         Must propose a business idea that meets the requirements of innovation, viability and                    Not able to obtain permanent residency in         for a set period.                                                                   However, from the date of submission of the
  visa) (                               Can have an entrepreneurial team, but must have individual                            scalability and obtain an endorsement letter from an approved endorsement body.                          the UK on this visa.                              You should spend the majority of your working time in the UK to develop your        visa application, it usually takes around 2 to 4
                                        endorsement.                                                                          Must be able to show business idea is:                                                                                                                     business venture(s), but will not be restricted from undertaking work in another    weeks to be processed.
                                                                                                                              • A new idea – cannot join/invest in business already operating in the UK;                                                                                job.                                                                                Use the priority service option (if available) and
                                                                                                                              • Viable, with growth potential; and                                                                                                                       You can progress to an Innovator visa after two years.                              receive an outcome within 3 to 5 working days.
                                                                                                                              • Innovative, must be an original business idea unique to anything else in the market
  Innovator visa (formerly              Experienced business people seeking to set up                                         Must have a minimum of £50,000 funding available to invest in a new business, and                        A 3-year visa.                                    You must meet the English language requirement as well as prove prescribed          Up to 3 months depending on timing of the
  known as Tier 1                       or run a business or business idea in the UK, which has                               obtain an endorsement letter from an approved endorsement body.                                          Permanent residency after                         personal maintenance funds for a set period.                                        endorsement.
  Entrepreneur visa)                    been endorsed by an approved body.                                                    No funds required if the business is already established and has been endorsed for a                     3 years’ continuous stay.                         You should spend most of your working time in the UK to develop your                However, from the date of submission of the
                                        Can have a team, but investment funds cannot                                          previous visa.                                                                                                                                             business venture(s) and will be restricted from undertaking employment for          visa application, it usually takes around 2 to 4
                                        be shared.                                                                            Must be able to show business idea is:                                                                                                                     another business.                                                                   weeks to be processed.
                                                                                                                              • A new idea – cannot join/invest in business already operating in the UK; and                                                                            An endorsement is required at every stage (initial application, extension and       Use the priority service option (if available) and
                                                                                                                              • Viable, with growth potential                                                                                                                            settlement).                                                                        receive an outcome within 3 to 5 working days.

  Tier 1 Exceptional                    A recognised leader (exceptional talent) or an emerging                               Must obtain an endorsement from a designated competent body. The designated                              A 3-year visa, extendable by a further 2          You must meet the English Language requirement.                                     Up to 3 months, depending on timing of the
  Talent visa                           leader (exceptional promise) in a qualifying field                                    competent bodies are:                                                                                    years.                                            There are only 2,000 places per year available under this visa category.            endorsement.
  (soon to be the Tier 1                (science and medicine; engineering; humanities; digital                               The Royal Society (for science and medicine);                                                                                                              You may work for an employer, work as a director or be self-employed.               However, from the date of submission of the
  Global Talent visa –                  technology; arts and culture which includes fashion,                                  The Royal Academy of Engineering (for engineering);                                                      Permanent residency after 3 years’                                                                                                    visa application, it usually takes around 2 to 4
  further information to                architecture, film and television).                                                                                                                                                            continuous stay under exceptional talent                                                                                              weeks to be processed.
  follow )                                                                                                                    The British Academy (for humanities);
                                                                                                                              Tech Nation (for digital technology);                                                                    route, or after 5 years under exceptional                                                                                             Use the priority service option (if available) and
                                                                                                                                                                                                                                       promise route.                                                                                                                        receive an outcome within 3 to 5 working days.
                                                                                                                              Arts Council England, (for arts and culture which includes fashion, architecture, film
                                                                                                                              and television).

  Tier 1 Investor visa                  Individuals with at least £2m in cash funds available.                                Have access to at least £2m to invest in UK-registered companies, excluding property                     A 3 years and 4 months visa will be granted,      Must have a UK bank account opened for the purpose of investment and the            Standard processing time is 2 to 8 weeks from
                                                                                                                              development or property management businesses.                                                           extendable by a further 2 years. Permanent        £2m must be held in cash funds, either in a UK bank account or be transferrable     the date of the application.
                                                                                                                                                                                                                                       residency after 5 years’ continuous stay.         to the UK.                                                                          Use the priority service option (if available) and
                                                                                                                                                                                                                                       Permanent residency can be expedited to 2         Must invest the £2m by way of share capital or loan capital in active and trading   receive an outcome within 3 to 5 working days.
                                                                                                                                                                                                                                       years of continuous stay if you invest £10m       UK-registered companies within 3 months of entry of the Tier 1 Investor visa.
                                                                                                                                                                                                                                       or 3 years if you investment £5m.                 No restrictions regarding activities in the UK and there is no English language
                                                                                                                                                                                                                                                                                         requirement.

*Please note: visa timings fluctuate, and the UK’s immigration rules and salary thresholds often change at short notice. In addition, this table summarises some key issues only and therefore should be used as a guide and not be
 relied upon to provide legal advice.
                                                                                                                         32                                                                                                                                                                                                       33
THE SOLE REPRESENTATIVE VISA: CASE STUDY                                                                                              Having ensured TSC was eligible to set
                                                                                                                                      up in the UK, and Mr. JM qualified to
                                                                                                                                                                                 •	A full description of TSC’s financial
                                                                                                                                                                                    activities, including details of assets,
                                                                                                                                                                                                                               that his “Representative of an overseas
                                                                                                                                                                                                                               business” visa application had been
                                                                                                                                      represent their organisation in the UK,       accounts and share distribution;           approved along with those of his three
                                                                                                                                      Smith Stone Walters set about assisting    •	A letter from TSC confirming their         dependent family members.
Smith Stone Walters secured visa approval under this category within eight                                                            in the preparation and submission of the      intention to establish a wholly-           Mr. JM had been granted permission to
days for a Chinese business touching down in the UK for the first time.                                                               UK visa application.                          owned subsidiary or register a             enter the UK for an initial three-year
                                                                                                                                                                                    branch in the UK in the same               period in order to perform the specific
                                                                                                                                      For convenience, Mr. JM’s biometric           business activity as their Chinese         task of setting up and running the UK
                                                                                                                                      appointment was arranged at the               based operation;                           branch or wholly-owned subsidiary of
                                                                                                                                      Fuzhou Visa Application Centre, even       •	A detailed business plan for the           his employer, TSC.
                                                                                                                                      though the completed application would        proposed UK office; and
                                                                                                                                      be assessed by the British Consulate       •	A job description, employment and          Should Mr. JM and his family decide to
                                                                                                                                      General in Guangzhou.                         salary details in respect of Mr. JM’s      remain in the UK long-term and extend
                                                                                                                                                                                    intended UK role.                          their existing visas, they would be
                                                                                             industry experience and knowledge;       In order to make this application a                                                      eligible to secure UK permanent
                                                                                          •	Must meet the English language           success, it was necessary to prepare a     Success! Visa approval…                       residence (“settlement”) after five years.
                                                                                             requirement;                             range of supporting documents for          Just eight working days after Mr. JM
                                                                                          •	Must be in receipt of a salary high      submission at his appointment. These       attended his biometric appointment in
                                                                                             enough to support himself and any        included:                                  Fuzhou, he received formal confirmation
                                                                                             family members he wishes to take
                                                                                             with him to the UK, without needing
                                                                                             to turn to public funds for help;
                                                                                          •	Must intend to work only as a
                                                                                             full-time representative of TSC in
                                                                                             China and not to undertake any
                                                                                             other employment upon arrival in
                                                                                             the UK; and
                                                                                          •	Must intend to establish TSC’s first
                                                                                             commercial presence in the UK, eg,
                                                                                             a registered branch or a wholly-
                                                                                             owned subsidiary.

                                                                                          As more overseas businesses look to
Our client is a technology company            family as TSC’s sole UK representative,
                                                                                          establish a UK hub, this UK visa route is
based in China with its head office in        Smith Stone Walters were engaged to
                                                                                          becoming increasingly popular.
Xiamen. For the purposes of this article,     assist in the filing of the UK visa
                                                                                          Companies wishing to take advantage
they will be known as TSC.                    application.
                                                                                          of this visa category, such as TSC, also
                                                                                          have a responsibility to fulfil certain
In order to expand their business into        Smith Stone Walters directed TSC and
                                                                                          conditions. Smith Stone Walters
the European market, TSC handed an            Mr. JM on the rules surrounding the Sole
                                                                                          therefore ensured TSC understood the
existing 27-year-old Chinese employee         representative visa and the
                                                                                          following:
(‘Mr. JM’) the responsibility of setting up   requirements Mr. JM needed to fulfil in
                                                                                          The parent company – TSC …
a wholly-owned subsidiary in the UK on        order to apply for this type of visa. Our
                                                                                          •	Must have satisfactory motivation
behalf of their Xiamen based operation.       advice included the following:
                                                                                             to establish a UK presence;
                                                                                          •	Must maintain its headquarters and
As General Manager, Mr. JM held a             •	Must have already been recruited
                                                                                             principal place of business outside
senior position within the organisation’s        and employed outside the UK by
                                                                                             the UK;
headquarters in China but was not a              TSC whose headquarters and
                                                                                          •	Must have no other branch,
shareholder within TSC. Alongside his            principal place of business are
                                                                                             subsidiary or representative already
existing knowledge of TSC’s operations,          outside the UK, prior to the
                                                                                             in the UK; and
Mr. JM also held relative sector-based           submission of the visa application;
                                                                                          •	Should intend to operate the UK
experience and possessed a strong             •	Must hold a senior position within
                                                                                             branch or subsidiary in the same
command of the English language.                 TSC (but not as a majority
                                                                                             type of business activity as its
                                                 shareholder) and have full authority
                                                                                             overseas business.
Having accepted the company’s offer to           to make decisions on its behalf;
move to the United Kingdom with his           •	Must have extensive and relative

                                                                 34                                                                                                                                  35
OPENING A
BANK ACCOUNT
Charles O’Neill, Head of Inward Investment at Metro Bank, tells
you what you’ll need to bring along if you’ve set up a company
or limited liability partnership (LLP).

Your business plan, key people,               Identification and verification:
markets and customers:                        • T
                                                 he bank needs to verify the identities
• What the firm will do, projected sales,      and addresses of the key individuals.
   income and expenditure.                    • U
                                                 sually we need a passport or driving
• Who are the key suppliers and                licence for ID plus a recent bank
   customers.                                   statement or utility bill for the address.
• Everything a bank needs to know to
   understand the account movements           Bank statements:
   and the services you need. Especially      • If your company is a newly registered
   with regard to industries and countries       subsidiary of an existing company, you
   to avoid payment being classed as             will need to provide 6 months
   unusual and so delayed or denied.             statements for your parent company.
                                              • D epending on where the initial
Company structure chart:                        funds come from and how much is
• Detailing ownership and respective           invested we may also need bank
   percentage shares held down to an            statements from the beneficial owners
   individual level.                            as well as an explanation of their
• You will be asked for underlying             source of wealth.
   documentation unless it is available
   on a public register. This might include
   things like the certificate of
   incorporation, share registers, share
   certificates, partnership agreements
   and trust agreements.

                                                                                             37
At a glance

             RECRUITING AND RETAINING TALENT
             Harry Martin, Manager of the European Division at Centre People
             Appointments, shares the key areas to consider when recruiting in the UK.

             UK legal requirements                      Interviews: providing equal                  The UK recruitment process
                                                        opportunities
RECRUITING
             •	Maximum 48-hour working week, but                                                    • Prepare details and salary/package
                individuals can opt-out                 The UK has strict discrimination laws        • Take the job to market
             •	Normal working day considered 9am       which will dictate what you can and          • Consider CVs and shortlist
                to 5pm, with one hour for lunch         can’t ask when interviewing candidates.      • Interview (ideally 2 to 3 stages max)

    AND      •	Flexible working is becoming more
                common in UK working culture – this
                might be worth considering for
                attracting top candidates.
                                                        Avoid questions relating to:
                                                        • Gender
                                                                                                     • Verbal offer
                                                                                                     •	Written offer (ideally within 24 hours)
                                                                                                        and contract

 RETAINING
                                                        • Age
             •	Minimum 20 days’ holiday and 8          • “Native” or “mother tongue” speakers       Ideally aim to have the process last no
                national holidays (most companies       • Nationality/ethnicity                      longer than 2 to 3 weeks.
                offer more to stay competitive and      •	Others – religion, sexuality, a parent/

  TALENT                                                                                             How recruitment agencies
                attractive to employees)                   planning a family, etc.
             •	Automatic enrolment pension                                                          can help
                contributions: employees have the       Knowing what you want when                   • Full end-to-end support
                option to opt-in or opt-out Minimum
                                                        starting your talent search                  •	Sample job descriptions,
                pension contributions are: 3% from                                                      salary guidance
                                                        London is a very competitive talent
                employer/5% from employee                                                            • Broad advertising and active search
                                                        market, so it’s important to set out clear
                                                        objectives for what you want when            • Arrange all interviews
                                                        starting your search:                        • Sample offer letters
             Right to work in the UK
             All employers in the UK have a responsi-
             bility to prevent illegal working.           Identify what staff are needed
                                                        •	
                                                          How many and when you need
             To do this, the employer should conduct      them by?
             a simple right to work check before
             employing someone.                           What order to hire staff
                                                        •	
             •	Employer must see the applicant’s         Start with senior commercial staff,
                original documents                        then add support staff?
             •	Employer must check that the
                documents are valid with the appli-       Prepare full job descriptions
                                                        •	
                cant present                              Staff will want written job details in
             •	Employer must make and keep               full, without this the process and
                copies of the documents and record        organisation can come across as
                the date you made the check               unprepared and unprofessional.

                                                          Salary and package
                                                        •	
                                                          Are you offering enough to secure
                                                          the right talent?
                                                          Recruitment agencies can help with
                                                          salary benchmarking to help you get
                                                          the salary range right.
                                                          Consider additional benefits outside
                                                          of base salary – these are a massive
                                                          drawcard.

    38                                                                      39
Quick guide to                                                                                                                          UK EMPLOYMENT LAW
EMPLOYMENT TAX AND NATIONAL INSURANCE                                                                                                   David Greenhalgh, Employment Partner at Joelson,
CONTRIBUTIONS (“NIC”) RESPONSIBILITIES                                                                                                  takes you through the key things to consider when
                                                                                                                                        building your team in London.
As an employer you have several tax and NIC obligations relating to your
workforce. Lee Knight, Employer Solutions Director at RSM, highlights the
main obligations new employers to the UK should be aware of.                                                                            There are three main categories of
                                                                                                                                        employment status when hiring in the
                                                                                                                                        UK: employees, workers and self-
                                                                                                                                        employed consultants (as individuals or
                                                                                                                                        through a service company).
The basics                                  Non-cash benefits and                         If HMRC contends that self-employed
Employers in the UK are required to         employee expenses                             individuals should have been treated as
                                                                                                                                        Employees and workers have statutory
register as an employer with HM             As an employer, you are also required         employees, it can recover the underpaid
                                                                                          tax and NIC which should have been            rights and protection whereas most
Revenue & Customs (HMRC), to pay            to report certain non-cash benefits
                                                                                          paid through PAYE from you together           self-employed individuals do not. The
employees in accordance with mini-          provided to employees on forms P11D
                                                                                          with interest charges and penalties.          employment status of the individual you
mum wage legislation and to deduct          by 6 July of the following tax year. It is,
                                                                                          Make sure the status of self-employed         are hiring will depend on their role. We
income tax and employees’ NIC from          however, also possible to “payroll”
                                                                                          individuals is properly considered from       can help you determine the correct
earnings through the Pay As You Earn        certain benefits and/or deal with
                                                                                          the outset.                                   employment status in each case.
(PAYE) system. Employer’s NIC is due        certain benefits via a PAYE
on employees’ earnings via this             Settlement Agreement.
                                                                                          Businesses can also have obligations in       For both employees and workers, an
system too.
                                                                                          respect of other off-payroll workers who      employer has to pay social security
                                            An exemption for employee businesses
                                                                                          are not engaged directly by them as           contributions to the UK Government.
Under PAYE you will need to complete        expenses that are not reportable to
                                                                                          individuals. In particular, the UK’s “IR35”   Employees have various protections
tasks by statutory deadlines each tax       HMRC and liable to tax or NIC exists,
                                                                                          rules, which apply when a worker              and entitlements including paid holiday
month. For example, information must        where conditions are met.
                                                                                          personally provides their services via        and notice, minimum levels of pay and a
be reported to HMRC online under Real
                                                                                          their own intermediary (such as a             limit on their working time, unless the
Time Information when employees are
paid; and tax and NIC must be paid to
                                            Do not get caught out on                      personal service company) can, with           employee has explicitly opted out. They
HMRC by the 22nd of the month               self-employed individuals                     effect from 6 April 2020, place complex       also get sick pay and a pension and
following payment. It’s important you       and off-payroll workers                       obligations on the end-user of such a         have family related leave and pay           and clients and/or interfering with         There is no such concept as
seek professional advice to find out        If you engage self-employed individuals,      worker’s services, and anyone else            entitlements.                               your supply chain for a period of time      “employment at will” in the UK,
whether this also applies to your           you are required to check that their          involved in the supply of such a worker.                                                  post termination.                           meaning that statutory minimum notice
                                                                                                                                                                                                                                periods apply to any termination of
international employees and directors       contractual and working arrangements          This can include the obligation to            Recruiting                                  Onboarding
working in the UK.                          support self-employed status by               operate PAYE.                                                                                                                         employment. Contractual notice
                                                                                                                                        During the recruitment process, you         During the first two years of
                                            applying certain tests.                                                                                                                                                             periods, on the other hand, usually vary
                                                                                                                                        need to avoid using any criteria which      employment it is possible to dismiss
Employers with a total pay bill in excess                                                                                                                                                                                       from one month for junior employees
                                                                                                                                        could be considered discriminatory.         unwanted employees, subject to special
of £3m each year are also required to                                                                                                                                                                                           to anywhere between three and six
                                                                                                                                        In order to maximise your legal             protections which apply to in relation to
pay an Apprenticeship Levy through the                                                                                                                                                                                          months for senior level hires. We
                                                                                                                                        protection, it is important to get your     discrimination and whistleblowing. After
PAYE system.                                                                                                                                                                                                                    recommend including a probation
                                                                                                                                        staff signed up to employment contracts     two years’ employment, you will need a
                                                                                                                                                                                                                                period in your employment contracts,
                                                                                                                                        drafted by specialist employment            solid legal ground to dismiss (such as
                                                                                                                                                                                                                                during which a shorter notice period
                                                                                                                                        lawyers. Contracts need to be detailed      redundancy or capability) and you must
                                                                                                                                                                                                                                will apply.
                                                                                                                                        and should cover areas such as              follow a proper process.
                                                                                                                                        confidential information, intellectual
                                                                                                                                                                                                                                The above is only a brief summary of
                                                                                                                                        property and post termination               You must ensure successful candidates
                                                                                                                                                                                                                                employment law in the UK and should
                                                                                                                                        restrictions. Carefully drafted post-       have the right to work in the UK. There
                                                                                                                                                                                                                                not be relied on as legal advice.
                                                                                                                                        termination covenants can protect your      are a range of visas that may be
                                                                                                                                                                                                                                Please contact David Greenhalgh for
                                                                                                                                        business against your former employee       available and a specialise immigration
                                                                                                                                                                                                                                more information: david@joelsonlaw.com
                                                                                                                                        joining a competitor, poaching your staff   lawyer will be able to advise you.

                                                                 40                                                                                                                                    41
HOW TO ATTRACT AND RETAIN TALENT                                                                                              SETTING UP
James Webb, Managing Director at Propel, draws on recent research
on talent in the workplace.                                                                                                   YOUR OFFICE
Whether growing your company from a people                   The importance of diversity and inclusion                   Clive Buckley, Founding Partner at First Office Hub, takes you through your
perspective, or in a new ecosystem or country – talent is
crucial. Previous surveys conducted at Propel have
                                                             Propel published the second book in its Digital Nation      options when choosing a serviced office space.
                                                             Series: Funding the Digital Economy to add to our
shown that at any point in a company, 63% of its staff       research and thought leadership on working culture,
might consider a new role within a year. So, what can        diversity and inclusion (D&I). Across 18 Female Senior VC
                                                                                                                         The “perfect” office is different for        but help is at hand,’’ explains                King’s Cross
companies do to ensure they hire the right people and,       interviewees, what came up time and time again was the
                                                                                                                         everyone. A startup might benefit from       Clive Buckley, Founding Partner                London’s largest transport hub has
once in place, keep them motivated, valued and happy         increased importance of D&I, both internally and in the
                                                                                                                         being in a collaborative co-working          at First Office Hub.                           undergone extensive regeneration over
as well as profitable?                                       companies that they partner with and invest in.
                                                                                                                         environment, whereas a well-established                                                     the past few years and is now home to
                                                                                                                         brand may feel more at home in their         Using a free flexible workspace broker         a selection of workspaces, as well as
Propel’s 2019 publication: Digital Nation: Propel’s Talent   The conversation is now moving to what needs to
                                                                                                                         own space. The good news is, with            can simplify the process of finding an         Google’s upcoming 1 million sq ft
Manifesto emerged from speaking to 13 business               happen next; how can companies hire, promote and
                                                                                                                         14 million sq ft of flexible workspace in    office. Brokers know the market inside         office space.
owners, founders and entrepreneurs as well as 200            retain those with diverse backgrounds and the
                                                                                                                         London and counting, there’s a match         out, can match you with options that
professionals working in the digital economy.                importance this carries.
                                                                                                                         out there for every business.                meet all your requirements and may             Westminster
                                                                                                                                                                      even be able to negotiate the best terms       Victoria in Westminster has also
The importance of culture                                                                                                Which office type should                     on your behalf.                                been regenerated to accommodate
Two thirds (67%) of respondents said they had declined                                                                   I choose?                                                                                   businesses moving to the area. Desk
a job offer due to the culture and values of the                                                                         All flexible workspaces have one thing in    Step 1: browse locations                       prices are cheaper than those in the
prospective employer. The biggest reason for leaving                                                                     common: licence agreements. Unlike a         London is a diverse ecosystem that             neighbouring West End and it’s also
their last company was people/culture/working                                                                            lease, a licence agreement allows you to     caters to businesses across all sectors,       a key transport hub.
environment (44%), with the opportunity for a new work                                                                   rent an office for shorter periods of time   and certain areas are better suited to         2. View options
challenge (34%) and a lack of career progression or                                                                      and there’s room for negotiation. Also,      some than others. For instance, financial      Once you’ve shortlisted your favourite
opportunity (28%) following close behind. Employees                                                                      monthly all-inclusive billing makes it       services companies often opt for an            offices and discussed your requirements
who say they have a great place to work were four                                                                        easier to keep track of cash flow.           office in the City of London, whereas          in more detail, your broker will arrange
times more likely to say they were willing to give extra                                                                                                              creative enterprises usually prefer places     for you to view them at a time that suits
to get the job done, according to research by Fortune                                                                    Co-working                                   like Shoreditch and Hoxton.                    you. You can squeeze a visit in between
magazine and Great Place to Work.                                                                                        If you’re a solopreneur or manage a
                                                                                                                                                                                                                     your meetings or make the best of a day
                                                                                                                         small team, you might decide to rent         Key locations include:                         by viewing several options at once. We
The importance of flexible working                                                                                       desks in a co-working space. Many run        West End                                       recommend you view 3 to 5 options.
Flexible working and respecting your employees are                                                                       events for members, enabling you to          London’s prestigious West End covers
essential drivers in attracting and retaining talent.                                                                    network and grow.                            Soho, Mayfair, Fitzrovia and Covent            3. Sign and move
People will turn down higher salaries for flexible                                                                                                                    Garden. As well as high-end retail             Most flexible workspaces are pre-fur-
working and benefits that tune in to their needs, like                                                                   Private office                               brands and galleries, the area is home to      nished and connected, so you can move
childcare, sabbaticals and medical insurance benefits.                                                                   If you want your own space, you can rent     a number of established businesses in          in at short notice and start working
Flexible working practices have increased up to 57%                                                                      a private office in a flexible workspace.    finance and media.                             straight away. You can usually sign for
from 49% in 2017 and 36% in 2016 and have become                                                                                                                                                                     anywhere between one to 36 months.
such a hot topic with potential and existing employees,
                                                                                                                         Shared amenities mean you’ll still pay a     City of London
                                                                                                                         competitive price and get to meet other                                                     Prices quoted exclude VAT, which is 20
it should be at the forefront of every business founder/                                                                                                              Bank, Moorgate and Liverpool Street are
                                                                                                                         businesses.                                                                                 per cent in the UK. You should expect to
owner/CEO’s mind.                                                                                                                                                     all part of London’s financial epicentre. As
                                                                                                                                                                                                                     pay a two month deposit when you sign,
                                                                                                                         Managed office                               such, it attracts banks, brokers, invest-
                                                                                                                                                                                                                     however, some operators charge less or
                                                                                                                         Designed with medium to large busi-          ment managers, private equity firms and
                                                                                                                                                                                                                     no deposit.
                                                                                                                         nesses in mind, a managed solution           other businesses in the finance sector.
                                                                                                                         provides a self-contained, customisable      Tech City                                      Visit First Office Hub’s website to
                                                                                                                         workspace solution on flexible contrac-      As the name suggests, this part of             browse offices across London.
                                                                                                                         tual terms.                                  London is popular with tech startups and
                                                                                                                         How to find an office                        digital creatives. Old Street (Silicon
                                                                                                                         “With so many office options out there, it   Roundabout), Shoreditch and Hoxton all
                                                                                                                         can be difficult to know where to look,      cater to new businesses looking to
                                                                                                                                                                      attract talent.

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