An Introduction to the UK Business Environment

by Oury Clark Chartered Accountants

10th February 2015

The UK Market

Positives

• Large domestic market- 64.1 million people (Spain 47.2)

• Second highest technology spend per head after USA

• Spring board to the world- a great base to internationalise your business.

• Based primarily on services, very little manufacturing

• Therefore we import a vast number of goods

Negatives

• We import a vast number of goods, the market is very competitive

• It is also a very mature market

• To bring a new product to market is comparatively difficult

Selling Direct

Approaching a Distributor:

• Be Prepared

• Innovation itself is not enough

• Demonstrate demand

• Unique Selling Points?

• Price point?

• Competition?

• Fulfillment?

Setting Up in the UK

• VAT registration

- £81k Threshold

- All online

- Non-UK company can register

• Payroll Registration

- Quick (10 Days)

- Relatively simple to administer

- Required for all UK employees

• Company Formation of a Limited Company

- Quick

- Inexpensive

- No prohibitive capital requirements

- 1 Director, 1 Shareholder minimum

- Signature and process now digital.

Tax incentives

What incentives can I get to do business in the UK?

• Grant/ government funding is more limited than in some countries- which comes as a shock to many clients- but UKTI can help advise on what funding options may be available.

• We do have a very competitive tax system• Low overall tax rate- 20%• R&D Tax Credits• Patent box• Creative Sector Tax reliefs- Film, TV, Animation, Video Gaming

• The are also incentives to encourage investment into businesses, such as EIS and SEIS investor reliefs.

Tax incentives

What incentives can I get to do business in the UK?

• Grant/ government funding is more limited than in some countries- which comes as a shock to many clients- but UKTI can help advise on what funding options may be available.

• We do have a very competitive tax system• Low overall tax rate- 20%• R&D Tax Credits• Patent box• Creative Sector Tax reliefs- Film, TV, Animation, Video Gaming

• The are also incentives to encourage investment into businesses, such as EIS and SEIS investor reliefs.

Tax incentives

What incentives can I get to do business in the UK?

• Grant/ government funding is more limited than in some countries- which comes as a shock to many clients- but UKTI can help advise on what funding options may be available.

• We do have a very competitive tax system• Low overall tax rate- 20%• R&D Tax Credits• Patent box• Creative Sector Tax reliefs- Film, TV, Animation, Video Gaming

• The are also incentives to encourage investment into businesses, such as EIS and SEIS investor reliefs.

Research & Development

• Research & Development

– Significant tax incentives for companies

undertaking R&D in the UK

‘An R&D project is one that seeks to achieve scientific or

technological advances. It will aim to advance the overall

knowledge or capability in a field of science or

technology. It will involve significant scientific or

technological uncertainty.’

Research & Development

• Two schemes:

1. SMEs get 125% in additional tax credit:

<500 Employees; and, either

Turnover < €100 million; or,

Balance Sheet < €86 million

Therefore a small company spending £1m on R&D gets extra tax deduction of £1.25m

2. Large companies get an additional 30% tax credit.

• If loss making a tax credit (cash back) can be claimed

• Note: R&D has to be directed from UK, but not necessarily performed in UK nor does the IP need to be owned in the UK

Patent Box

• From 1st April 2013:

• 10% tax rate for income from Patents

• UK & European Patents only

• Relief to be phased in over 5 years

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Summary

• BE READY – KNOW YOUR MARKET

• GET ADVICE EARLY

• Use free resources such as London and Partners and UKTI

• Take advantage of tax reliefs available – there is not much Government funding

• Opening a bank account takes time

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The Oury Clark “Group”

Unlike most professional firms... we see the whole picture.

• Family run business established in 1935

• A broad and high level of Interdisciplinary professional skills at our core

• Coordination increases speed and efficiency and decreases cost

• Specialists in overseas companies establishing in the UK for 20 years

• Offices in Central London and beside London Heathrow Airport

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Oury Clark Services

• Tax, audit, statutory accounts, back office (payroll, VAT)

• Immigration, employment, company commercial, property, IP

• Staff benefits, mortgages, pensions, healthcare, investments etc

• Managed bespoke service for all industries

• Development/replacement capital, refinancing, M&A, MBO/MBI

• Individual authorisation, On-going compliance & reporting, Registration advice and Systems & policy development

• Bookkeeping, Credit control, Management accounting/reporting, Payment services, Payroll and VAT compliance

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David Rogers ACA David.Rogers@ouryclark.com

London Office Thames Valley

10 John Street 58 Herschel Street

London Slough

WC1N 2EB Berkshire, SL1 1PG

+44(0)20 7067 4300 +44(0)1753 55 1111