Outsourced compliance for international businesses
Setting up and maintaining ongoing compliance for a UK business can be complex and confusing. Many businesses don’t know where to begin when setting up business in the UK.
Our dedicated outsourced finance team caters to every internal finance function you need in your international business, from bookkeeping to VAT. By embracing the latest technology, we can offer a bespoke digital solution that will be the perfect fit.
What compliance do you need to consider?
Entity type and statutory accounts
In the UK, there are two main types of incorporated entity which you can used to trade.
- Limited Company (LTD)
- Limited Liability Partnership (LLP)
The most common entity type is a Limited Company, but there are certain advantages to operating as a Limited Liability Partnership. The best fit will always be dependent on your individual circumstances as there isn’t a one size fits all.
Limited Companies and Limited Liability Partnerships are both required to prepare statutory accounts which must be filed with both HM Revenue & Customs and Companies House.
Record keeping requirements
Incorporated entities must keep copies of their accounting books and records for at least six (6) years from the end of the company financial year end to which they relate. The primary records making up accounting books and records are bank transactions, sales invoices, purchase invoices, journal logs and key contracts. This list is not limited however so there may be additional documents you need to retain.
These records can all be in digital format and we recommend all business try and keep as much of their accounting records in a digital format as possible. If you are a VAT registered business, to comply with new Making Tax Digital (MTD) legislation, your accounting records must be kept in a digital format and submitted directly to HM Revenue & Customs through specific approved accounting software.
Trading limited companies are required to register with HM Revenue & Customs for corporation tax, either before they start trading or as soon as possible after.
At present the corporation tax rate for all trading companies in the UK is 19% on taxable profits. There are a number of reliefs available in the UK to help reduce corporation tax liabilities (and sometimes even create repayments). A few of these for consideration are:
- Capital allowances
- Research and development (R&D)
- Creative industries (theatre, film, TV, animation or video games)
- Intangible asset relief
Value added tax (VAT)
Trading businesses with turnover of more than £85,000 in a 12 month period are required to register for VAT in the UK. It is possible to voluntarily register for VAT where your turnover is below this threshold. This is common where you are transacting in a business to business relationship. Whether this works for your business or not will be highly dependent on your individual circumstances.
The UK currently has a standard rate of 20% value added tax charged on goods and services. There are certain goods and services which carry a lower VAT charge. VAT returns must be filed electronically and in most circumstances under Making Tax Digital (MTD) conditions.
Payroll (PAYE) & Auto-enrolment pensions
To employ and pay staff or directors in the UK, you must register a PAYE scheme with HM Revenue & Customs. You may also be required to operate an auto-enrolment pension scheme for your staff.
You can opt to pay staff on a weekly basis, monthly basis, or even ad hoc. Payroll information must be submitted on a monthly basis to HMRC, which is made through a Real Time Information (RTI) submission.
You are no longer required to have a company secretary formally registered at Companies House as an officer of the company. However, there are still a number of obligations and best practice things to comply with to run your company effectively.
The UK doesn’t have a strict reporting requirement for company accounts so you can choose to report your financial information for whatever period works best. It is generally suggested the reports run in line with any additional business interest you may have.
Self-assessment (personal tax)
If you are a UK tax resident then you will be required to register and prepare self-assessment (personal tax) returns.
There are a number of specific and strict rules which govern whether or not you are a UK tax resident. These will need to be considered in detail based on your individual circumstances.
How we can help:
- Advice on which type of entity is the correct option for your business based on your individual requirements
- Manage the entity incorporation
- Prepare statutory accounts in line with the reporting requirements in the UK, including the appropriate filings with both HM Revenue & Customs and Companies House.
- Set up your accounting systems for operational and accounting requirements.
- Ongoing management of business record keeping.
- Support and assist opening a UK business bank account which can often be tricky if you’re based overseas.
- Manage corporation tax returns, ensuring they are accurate and compliant.
- Our team contains specialists in all taxes and can help support with the specific schemes and reliefs
- Advice on VAT, including registering with HMRC and assisting with ongoing VAT submissions.
- Set up payroll and Auto-Enrolment for staff and directors
- Ensure you meet all of the specific requirements for your company secretarial duties and keep the business above water with good corporate governance
- Advice on your personal UK tax obligations.