All big companies and businesses were just dreams and ideas at some point. However, proper execution of those ideas makes it big. Some are so big that they are the global leaders in their industry. Though companies from all parts of the world compete in the worldwide market, the regulations for starting a company in each country are different. One must adhere to the guidelines set by their governments for the smooth functioning of their company.
However, let’s discuss the regulations and steps that one must follow to start a company in the UK. You have got a business idea and want to execute it too. But aren’t aware of the legal intricacies that come with company registration? So, here’s a list of five things you must know about the company registration process in the UK.
UK Vat
source: huffingtonpost.com
The UK VAT (Value Added Tax) is the first thing to know before starting a company in the UK. Most goods and services in the UK are subject to value-added tax (VAT), so it’s both an indirect and consumption tax. Usually, the companies levy the tax on behalf of the government. So, if you are planning to register a company, you may have to register for VAT.
If the value-added tax turnover was more than £85,000 in the past 12 months, VAT registration is mandatory. However, since yours would be a new company and if you anticipate that it would make more than £85,000 in the next 30 days, you better start looking for vat registration services in UK. With proper guidance, you can save big on such taxes.
UK Corporate Tax
source: entrepreneur.com
You must be aware of the UK corporation tax before registering your company. All registered companies pay corporate tax to the government for doing business. The tax rate for corporate tax in the UK is 19% of all company profits.
However, if you own a sole proprietorship or a partnership firm, instead of a limited company, you must only pay the income tax by submitting the IT (income tax) returns. So if you are starting a small business, you don’t have to bother about the corporate tax and can pay the income tax as usual. The registration and filing for corporation tax are carried out through the HMRC.
Choosing a Company Structure
Before registering your company, you must choose the structure of your company. There are primarily three company structures in the UK – sole proprietorship, partnership firm and private limited company. Each company structure has its pros and cons. You must choose your company structure based on your requirements and the scale of the business. For instance, if you are the only person running a small business out of your home, a sole proprietorship makes more sense. However, most entrepreneurs starting a company prefer to register their company as a private limited company. The primary reason for that could be to manage the taxes better.
Submitting the Company Information
source: businessnewsdaily.com
When you register a company in the United Kingdom, most of the information provided will be public by the Companies House. You must submit critical company information to the Company House. The primary required company information includes a registered office address for your company. The office address is where the HMRC and the Companies House will send any mail.
According to the regulations, the registered address must be in the United Kingdom, and the authorities must be able to reach out to the company directors at the registered address. The next thing you would need to submit is the details about the directors. Assuming there would at least be one director for your company, the Companies House requires details like their full name, date of birth and address.
UTR Number
The HMRC issues a UTR (unique taxpayers’ reference) number to organisations and individuals for self-assessment. The purpose of the UTR is to keep track of the taxpayers in the country. The validity of the UTR is for a lifetime, and there is no renewal. All the businesses registered in the UK must register for self-assessment and would receive their UTR number within 10 to 21 working days of registering. Companies limited by guarantee and shares require UTR. Even LLP (limited liability partnership) firms need a UTR number.
Final Thoughts
source: careeraddict.com
Those were the top five things to know about company registration in the UK. As mentioned above, there are a million things involved while registering your company. Right from choosing the company structure, name and the board of directors, the list of tasks is endless. It is always advisable to take one step at a time. However, it’s better to understand all the regulations carefully and register for the required taxes. Hopefully, the article helps you gain a better insight into registering your company.
