It opens up new markets, fresh investors and, yes, the chance to complain about the weather with new audiences. But before you daydream about your London office views or spotting your logo on a double-decker bus, let’s talk structure.
Your UK business structure is more than a box-ticking exercise. It determines everything from your tax obligations to how easy it is to open a bank account or hire local talent. If you’re wondering how to set up your UK startup legally, this article is your friendly, practical companion through the minefield of HMRC, VAT, PAYE and everything in between.
1. Choose the right UK business structure
There’s no one-size-fits-all answer here, but the most common options for Aussie startups include:
Limited company
The most popular and flexible option. You get limited liability, local credibility and better access to investment, but it comes with director responsibilities, annual filings and some setup admin.
Branch
This is essentially an extension of your Australian company. It’s cheaper to set up but may be viewed as less committed by investors and can come with some tricky tax and liability questions.
Subsidiary
A wholly owned company under your Australian parent. This can make sense if you plan to build a full-scale UK team or raise money locally, but it adds complexity to reporting and tax.
Key considerations:
- Ownership structure and how it affects tax
- Whether you’ll be treated as UK tax resident
- How the structure is perceived by investors and customers
- What happens if (when) you raise more capital
Need help choosing? Our full breakdown of options is here: Expanding to the UK – Which Business Structure is Best?
2. How to set up a UK startup legally: payroll, tax and compliance
Once you’ve picked a structure, it’s time to navigate the glamorous world of compliance. This is the part where good advice makes all the difference.
You’ll need to:
- Register with HMRC (Her Majesty’s Revenue & Customs – not an actual person, sadly)
- Set up PAYE (Pay As You Earn) for your employees
- Handle National Insurance and mandatory pensions
- Register for VAT if your turnover exceeds £90,000
- Avoid double taxation between the UK and Australia
Our compliance-focused guide breaks it down in plain English: Global Ambitions, Local Compliance – Tax Considerations for Expanding to the UK
3. Practical steps and timelines
Timing matters. Don’t leave these to the last minute or try to do it all from your hotel room in Soho.
Here’s what you’ll need to tackle:
- Register your company with Companies House (takes a few hours, if you’ve got your docs ready)
- Set up a UK bank account (can take weeks – start early)
- Prepare legal documents including articles of association
- Ensure you meet director residency requirements, which may affect your structure choices
Pro tip: bank account delays are one of the most common issues founders face. Get this ball rolling early or risk not being able to pay your first hire (or invoice your first customer).
To keep track of it all, grab our free Expanding to the UK: Setup Checklist
4. The importance of getting local advice
It might be tempting to figure it all out yourself, but trust us, UK compliance is not a “watch one YouTube video and wing it” situation.
Talking to a UK-savvy accountant or CFO advisor early can save you weeks of confusion and thousands of pounds. It also helps you avoid choosing a structure that looks fine on paper but falls apart when you try to raise funds or scale your team.
As Mike puts it:
“Get the structure right before you even think about hiring or raising. Fixing it later is a lot like moving house mid-dinner party – stressful, messy and guaranteed to spill something important.”
5. Common mistakes people make
We’ve seen a few too many startup expansion horror stories. Here are some of the usual suspects:
Choosing the wrong legal structure
Some founders register a UK branch without realising it limits their tax flexibility or puts off investors.
Delaying HMRC registration
Late PAYE or VAT setup leads to payroll delays and unnecessary fines. Don’t give your new team a reason to panic.
Assuming Australian rules apply
They don’t. Employee rights, pensions and contractor rules are different. That “contractor” you hired might legally be an employee in the UK.
Skipping the bank account setup
Without a UK business account, you can’t pay salaries, get paid or do much of anything. Start early. Be patient. Bring snacks.
Ignoring director residency rules
Some structures require a UK-resident director. Don’t get caught out needing one at the last minute.
Trying to do it all in-house
Yes, founders are scrappy. But legal and tax structuring is not where you want to DIY. A bit of professional help early on can save you rework, delays and a lot of forehead-slapping later.
Final tips from the trenches
Remco’s quick-fire advice for structuring your UK move:
- Choose your structure with the end goal in mind. Think funding, hiring, operations and compliance
- Register with HMRC and PAYE early. Payroll waits for no one
- Get someone local in your corner, even part-time
- Budget for setup costs properly, and don’t skimp on advice
Want everything in one place? Download our Guide for Australian Startups Expanding to the UK
“Structure is like scaffolding – it’s not the fun bit, but without it, everything wobbles. Get it right early, and scaling gets a whole lot easier.”
– Mike, Co-founder, Standard Ledger
Want help getting it right?
We’ve helped heaps of Aussie startups make the leap to the UK with fewer headaches and more confidence. If you’re serious about expanding, let’s talk.👉 Book a free call with us and get your structure sorted the smart way.
