Setting up in the UK

Every journey… 

A checklist for UK Company setup as employer

As the UK continues to lead the way in the post-Covid recovery stakes, it’s not surprising that more entrepreneurs from outside the country are looking into the possibility of setting up a business in the UK.  

As they begin that journey, for many it will come as a surprise that there exist several hoops they must jump through to get started. This checklist outlines the key milestones for setting up in the UK for those coming in from outside the country 

  1. Set up the entity: Unless you want to handle it yourself, it makes sense to engage a company to set up the entity. This is the first step towards starting a UK company and marks the beginning of the journey. This is typically handled by specialist accountants. If you so choose, you can also engage accounting services at the same time 
  1. Register the entity at Companies House: it’s the UK’s register of business entities. Registration fees will apply but they are small nominal amounts. Once registered you then become part of the UK business ecosystem.
  1. Register with HMRC, Corporation Tax and VAT if required: The Revenue will need to be made aware of your existence from the moment you begin trading. To understand whether you need to register for VAT, this guide should help. 
  1. Engage legal and accounting advice: Many start ups opt to run their own accounts and bookkeeping – the boom in online self-service accounting software reflects and drives that – but if your business is going to grow and scale this can very quickly lead to trouble as the demands on the owners grow too. Getting a good accountant in place – and legal advice if necessary – can save a lot of heartache and stress further down the line. 
  1. Take out correct insurance: you are legally required at a minimum – to take out employers’ liability insurance. This covers any compensation claims made by your employees for injury or damage that’s caused by their work. If your business employs anyone then you need at least £5m of cover, and you could be fined a maximum of £2,500 for every day that you don’t have insurance. The legislation makes a few exceptions, for example if you only employ immediate family members.

Other types of cover that you should consider taking include: 

  1. Register a PAYE scheme with HMRC, if required: You normally need to register as an employer with HM Revenue and Customs (HMRC) when you start employing staff, or using subcontractors for construction work. You must register even if you’re only employing yourself, for example as the only director of a limited company.
  2. Set up Pension for employees, if PAYE scheme registered: UK employers are obliged to offer employees a pension scheme. Employees may choose to opt out, but the scheme must be registered in any case.
  3. Arrange for each employee to receive a contract of employment which should contain key terms of employment (job title, pay and any benefits), hours and place of work, and start date and any probationary period.

At Paul Beare Ltd we have carved out a niche as the leading player helping overseas owners and start ups to set up and grow in the UK. If you’re in need of advice or support in for your UK growth plans, or any other issue, we’re right here for all your needs. You can contact us for help from tax and payroll to accounting and banking.