During our recent trip to the USA, I was asked a series of questions about the UK economy and what US companies should be aware of when looking to the UK for expansion. Below is a summary of the main questions which were put to me. 

Is Brexit an issue? 

Historically, US companies have used the UK as their springboard into Europe and we had grave concerns about how the UK leaving the European Union (EU) would impact here. However, the shared language, similar cultures and favourable Corporation Tax rates in the UK mean that we are still attracting foreign direct investment. 

Admittedly, we have manufacturing clients who have now chosen to warehouse goods in Europe but, we have been able to help them with this by providing them with Customs Duty advice and connecting them to a European adviser as part of our membership of DFK International. 

What is the best way to for my company to set up a Permanent Establishment in the UK? 

If you are serving a certain geographic area, setting up a Branch may be an option. However, in our experience, we find that most businesses choose to set up a separate legal entity as a subsidiary of the wider group. In most instances, this will provide a layer of protection between the interests of the parent company and the overseas entity. Accountants in the UK are able to form companies on behalf of their clients. 

How quickly can I set up a UK bank account? 

It is advised to set up a UK bank account and you will need to do so if you are running a UK payroll. Even if you are not planning on running a UK payroll, it is a good idea to have a UK bank account in order to keep accounting processes simple.

Setting up a bank account can take longer than expected due to the rigorous identity and anti-money laundering checks. Currently, there are some High Street banks who are hesitant to open new accounts for companies under a certain turnover level. My advice would always be to start the process as soon as you can and of course, your accountant will have a steer on which banks are open to bank your geography and/or business sector. 

Should my employees be employed or operate as contractors? 

Advice will always be needed to determine whether an individual is indeed an employee or a contractor. Payroll tax and security implications can easily occur if not considered especially due to the IR35 legislation in the UK which has been covered by my fellow Partner Leigh Smith in this article.

Do employees require an employment contract?

There is no legal requirement for an employee to have a written contract of employment. However, we would always recommend providing one for clarity and to protect your business. It should be written in accordance with local employment legislation. UK employers, however, are legally required to automatically enrol eligible employees into a workplace pension, where both employer and employee make contributions at statutory minimum levels unless the employee choses to opt-out. 

Do employees need a visa? 

Broadly, yes. There are several options available which can be found on the Government website. Our HR team can provide a useful sounding board here, having supported both our business in attracting talent from Overseas, as well as some of our clients. 

Will UK taxes always need to be paid? 

As to be expected, there are several criteria which determine which UK taxes are payable and when. If in doubt, speak to a tax adviser as the penalties for not reporting and paying tax can be high. It is common for VAT, Payroll taxes and Corporation tax to all be applicable. Additionally, our tax team can work with you to consider any Cross-border implications.