What is a P45?
A P45 is the document given to a member of staff that has ceased employment with their current employer.
It provides your new employer with details of how much taxable salary they have paid over the course of the current tax year, along with how much has been deducted, and the tax code at the time of leaving your last job.
Your former employer is responsible for issuing your P45, although there is no legal timescale in which it must be issued. Instead, employers are instructed to provide it on your final day of employment, or “without reasonable delay” if this is not possible.
It provides your new employer with details of how much taxable salary they have paid over the course of the current tax year, along with how much has been deducted, and the tax code at the time of leaving your last job.
Your former employer is responsible for issuing your P45, although there is no legal timescale in which it must be issued. Instead, employers are instructed to provide it on your final day of employment, or “without reasonable delay” if this is not possible.
Is the standard working week in UK just 37 hours?
The standard working week in the UK does not need to be 37 hours. However, staff should not work more than 48 hours per week (averaged over 17 weeks unless they opt out of the Working Time Regulations).
It is not a requirement that employees work 09.00 – 17.00. However, lunch breaks or other breaks are not working time but there needs to be an unpaid break of at least 20 mins for staff that work 5 hours or more.
Why is a P45 so important?
Without a P45, your new employer won’t be able to make sure you’re assigned on the correct tax code. This means you could end up paying more tax or be put on an emergency tax code. Although this money can be reclaimed by contacting HMRC, this can be avoided if a P45 is available.
Can employees work under UK contracts, be paid from the UK but remain a resident of Sweden?
If an employee recruited overseas is not resident in the UK, generally no PAYE is due unless the non-resident employee performs duties in the UK which are more than incidental to their overseas work. ‘Incidental duties’ are infrequent visits, such as training in the UK or general meetings.
Assuming there is no PAYE obligation, it is possible to pay non-resident employees on a gross basis via a UK payroll. However, as the employees will be receiving gross pay, they will need to settle any taxes by filing a tax return in their own country.
There is no need to apply to HMRC to pay the employees without PAYE deduction if they are:
• working wholly outside the UK (apart from incidental duties), • are not and have never been resident in the UK and, • do not intend to come and work in the UK.
It is important to determine the three cases above as it will have a bearing on how the employees are treated. The employees will also need to be provided with a contract of employment that will be written under English law.
Finally, care does need to be taken that the employee’s activities do not unwittingly create a deemed corporate presence for your company in the overseas territory (Sweden).The concept of a permanent establishment (corporate presence) is either a physical office/factory in Sweden or a non-physical or ‘Agent’ Permanent Establishment – an ‘agent PE’, being a person/employee who is legally and/or economically dependent upon the foreign principal and has the power to bind the foreign company into contracts. To expand further, such individuals may give rise to an agent PE of the foreign company if they:
Assuming there is no PAYE obligation, it is possible to pay non-resident employees on a gross basis via a UK payroll. However, as the employees will be receiving gross pay, they will need to settle any taxes by filing a tax return in their own country.
There is no need to apply to HMRC to pay the employees without PAYE deduction if they are:
• working wholly outside the UK (apart from incidental duties), • are not and have never been resident in the UK and, • do not intend to come and work in the UK.
It is important to determine the three cases above as it will have a bearing on how the employees are treated. The employees will also need to be provided with a contract of employment that will be written under English law.
Finally, care does need to be taken that the employee’s activities do not unwittingly create a deemed corporate presence for your company in the overseas territory (Sweden).The concept of a permanent establishment (corporate presence) is either a physical office/factory in Sweden or a non-physical or ‘Agent’ Permanent Establishment – an ‘agent PE’, being a person/employee who is legally and/or economically dependent upon the foreign principal and has the power to bind the foreign company into contracts. To expand further, such individuals may give rise to an agent PE of the foreign company if they:
- are involved in the conclusion of contracts on behalf of the foreign company;
- or play the principal role leading to the conclusions of contracts that are routinely concluded without material modification by the company.
Appendix – Times of Supply: When a VAT invoice is issued
| Date invoice is issued | Time of supply (tax point) | Effect of full advance payment |
|---|---|---|
|
Before the date the supply takes place |
The date the invoice is issued |
If payment is received before the invoice is issued, time of supply (tax point) is the date payment received |
|
On the same day that the supply takes place |
The date the invoice is issued |
If payment is received before the invoice is issued, time of supply (tax point) is the date payment received |
|
Between 1 and 14 days after the date the supply takes place |
The date the invoice is issued |
If payment is received before the date the supply takes place, the time of supply (tax point) is the date payment received |
|
15 or more days after the date the supply takes place |
The date the supply takes place (unless the supplier has permission from HMRC to move the time of supply to more than 14 days afterwards – in which case it will be the date of the invoice) |
If payment is received before the date the supply takes place, the time of supply (tax point) is the date payment received |
When no VAT invoice is issued:
| Date full payment received | Time of supply |
|---|---|
|
Before the date the supply takes place |
The date the payment is received |
|
On the day when the supply takes place |
The date the supply takes place |
|
After the date when the supply takes place |
The date the supply takes place |
For more detailed guidance, please check the HMRC manual on VAT Place of Supply.
Why we do Anti-Money Laundering (AML) Checks
The objective
To learn as much as possible about the legal owners of a UK entity. Where the UK company is a subsidiary of another company we need to determine, for each company, the persons who are the ultimate beneficial owners and the persons who have operational control. We usually undertake this process as part of our setup when undertaking a new client.
Why do we do this?
The financial services industry in UK has been subject to vigorous Anti-Money Laundering Requirements (AMLR) since the introduction of the First Money Laundering Directive in 1991 as revised and codified in The Money Laundering Regulations 2007.
We are required to carry out these checks – they are not optional.
What is involved?
We need to carry out Know Your Client checks which include:-
Details of the nature of business.
An organigram showing the ownership structure so that the ultimate beneficial owners can be identified. We need to know names of persons holding 5% or more of the shares and we will need further evidence for shareholders with a holding of more than 25%. We may need to ask for independent confirmation of shareholdings.
We need to know the names of the persons who have operational control, these will include the directors of the UK company and directors of the parent company.
For each UK director and for each beneficial owner with a shareholding of more than 25% we will need to have:
· Photographic Proof of Identity (such as a passport) and · Evidence of home address (such as a recent utility bill or bank statement)
Where we cannot physically meet these persons we will need notarised copies of these documents instead.
Upon receipt of these documents
Depending on the answers above we may need to ask for further information. Once documents have been received, we then have to carry out electronic searches regarding possible criminal activity.
What do we do with these documents when the checks are completed
They are retained on our permanent file to be provided as evidence that we have carried out the necessary checks, and have considered the risk assessment, as proof of our compliance with legislation.
To learn as much as possible about the legal owners of a UK entity. Where the UK company is a subsidiary of another company we need to determine, for each company, the persons who are the ultimate beneficial owners and the persons who have operational control. We usually undertake this process as part of our setup when undertaking a new client.
Why do we do this?
The financial services industry in UK has been subject to vigorous Anti-Money Laundering Requirements (AMLR) since the introduction of the First Money Laundering Directive in 1991 as revised and codified in The Money Laundering Regulations 2007.
We are required to carry out these checks – they are not optional.
What is involved?
We need to carry out Know Your Client checks which include:-
Details of the nature of business.
An organigram showing the ownership structure so that the ultimate beneficial owners can be identified. We need to know names of persons holding 5% or more of the shares and we will need further evidence for shareholders with a holding of more than 25%. We may need to ask for independent confirmation of shareholdings.
We need to know the names of the persons who have operational control, these will include the directors of the UK company and directors of the parent company.
For each UK director and for each beneficial owner with a shareholding of more than 25% we will need to have:
· Photographic Proof of Identity (such as a passport) and · Evidence of home address (such as a recent utility bill or bank statement)
Where we cannot physically meet these persons we will need notarised copies of these documents instead.
Upon receipt of these documents
Depending on the answers above we may need to ask for further information. Once documents have been received, we then have to carry out electronic searches regarding possible criminal activity.
What do we do with these documents when the checks are completed
They are retained on our permanent file to be provided as evidence that we have carried out the necessary checks, and have considered the risk assessment, as proof of our compliance with legislation.
When are UK payroll taxes due for payment?
Payroll taxes are payable to HM Revenue and Customs after the 6th but before 22nd of the month following the payroll date, i.e. for a pay date of 31st March payroll taxes need to be paid after 6th April but before 22ndApril.
For further information on setting up or processing a UK payroll, see this Simple Guide to Operating a UK payroll for overseas companies.
What are full UK statutory accounts?
HMRC requires the following to be submitted to them:
- balance sheet detailing the value of everything the company owns and is owed on the last day of the financial year and must be signed by a director
- profit and loss account showing the company’s sales, running costs and the profit or loss it has made over the financial year
- notes about the accounts
- director’s report.
How long does it take to register for VAT in the UK?
This will either be quickly – within 2-3 weeks, or longer, if your application is subject to further checks by HMRC.
If your application is subject to further checks, these can be for a number or reasons, and can be requesting further information surrounding the business, where it trades from, what the business does, and further evidence of support – such as potential agreements with clients and information from directors. HMRC is looking to “verify” that your operation is genuine, and will be trading in the UK – and as such warrants VAT registration.
If your application is subject to further checks, these can be for a number or reasons, and can be requesting further information surrounding the business, where it trades from, what the business does, and further evidence of support – such as potential agreements with clients and information from directors. HMRC is looking to “verify” that your operation is genuine, and will be trading in the UK – and as such warrants VAT registration.
How long does it take to setup a UK bank account?
We advise around two months from start to finish.
Opening a bank account in the UK is seamless for our clients – we complete all the form filling, introduce you to the appropriate bank and begin the conversations with the Relationship Manager.
We know that two months will most likely hinder your traction, so we open a temporary bank account for you in the interim, until your real account is operational.
This checklist of items explores from a high-level the consideration points and documentation required to open a UK bank account.
Opening a bank account in the UK is seamless for our clients – we complete all the form filling, introduce you to the appropriate bank and begin the conversations with the Relationship Manager.
We know that two months will most likely hinder your traction, so we open a temporary bank account for you in the interim, until your real account is operational.
This checklist of items explores from a high-level the consideration points and documentation required to open a UK bank account.
What is the minimum number of days for annual leave in the UK?
Employees in the UK are entitled to 28 days annual leave, which is 20 annual leave days plus 8 public and bank holidays. This is the minimum annual leave that an employee is entitled to but it is more usual for an employee to receive more than this, eg, 25 days plus bank and public holidays.
Do I need to take out any insurance in the UK?
Some home territory policy’s cover trading in the UK. If they do not, it can be expensive to add it on to that particular policy.
It is a legal requirement to have Employers and Public Liability insurance. These are two separate policies, but for most startups, a combined policy can be obtained.
You may also need Professional Indemnity Insurance – if you are practicing in a profession that requires this.
Product Liability Insurance is also available.
We begin the conversations on your behalf with an independent broker who can obtain quotations for these policies.
It is a legal requirement to have Employers and Public Liability insurance. These are two separate policies, but for most startups, a combined policy can be obtained.
You may also need Professional Indemnity Insurance – if you are practicing in a profession that requires this.
Product Liability Insurance is also available.
We begin the conversations on your behalf with an independent broker who can obtain quotations for these policies.
What’s the best type of entity to establish?
That depends on what your objectives for the UK/EU are. Why are you establishing here? What are you trying to achieve? Are you looking at taking on any members of staff?
If you are looking to test the market and understand what the landscape could look like, it might be better to register as a branch.
If on the other hand you already have customers/clients and are looking to gain more – it might be more beneficial to set up a Ltd company.
This page contains detailed guidance on the types of UK legal structures available.
Companies House in the UK – what is it?
Under company law, a director holds responsibility for filing certain documents with Companies House in the UK.
Companies House needs to be informed whenever a new director (or company secretary) is appointed or when a director steps down and resigns. They will also need to be told if a director’s personal details have altered (a change in address, for example). This must be done within 14 days.
Other documents that must be filed include the annual return, the annual report and accounts, and changes to the registered company address.
The late filing of accounts can involve penalties of up to £1,500 for private companies and up to £7,500 for public companies.
Companies House needs to be informed whenever a new director (or company secretary) is appointed or when a director steps down and resigns. They will also need to be told if a director’s personal details have altered (a change in address, for example). This must be done within 14 days.
Other documents that must be filed include the annual return, the annual report and accounts, and changes to the registered company address.
The late filing of accounts can involve penalties of up to £1,500 for private companies and up to £7,500 for public companies.