Expanding to the UK: Set up checklist
Thinking of expanding from AU to the UK?
Great idea! Speaking from experience, the UK is a great place to be in business. It’s big, brimming with opportunity and very well mannered 😄 .
But with expansion come all the niggly details of setting up in another country. It’s easy to be overwhelmed, so we’ve put together a checklist to help you focus and attack that expansion to-do list. Tally ho, let’s go!
Just a reminder that this checklist is general in nature. Please don’t take it as personal tax, financial or other advice (you need to speak to us for that).
1. Choose your business structure
In most cases, a wholly owned subsidiary is the best option. A subsidiary is an incorporated body (a company) and a separate legal entity from the Australian parent company. If you grow significantly in the UK, you’ll almost always end up with this structure.
- Easier to engage with the local market because customers/investors usually prefer dealing with a local entity
- Simpler to repatriate funds back to Australia
- AU taxpayers can typically claim a tax offset for the tax paid by the UK company (called ‘double taxation relief’)
- Can access UK R&D Tax Credits, grants and investor tax relief schemes (if eligible)
- Profits of UK activities will be taxed in the UK at lower rates, but you can’t offset any AU tax losses
Watch out for: IP. Make sure your IP is sitting in the right place (AU or UK). Check with a startup friendly lawyer (like our friends at Sprintlaw).
2. Register with Companies House
All UK companies need to register with Companies House (it’s similar to ASIC in Australia).
- Company name
- Directors details (you don’t need a local director but it can make things easier)
- Registered address (for official mail – there are services for this if you don’t have anyone in-country)
- Articles of association (similar to a company constitution in Australia)
Once you’re registered with Companies House, there are annual requirements including annual confirmation statements and accounts.
Eyes glazing over? Skip down to point 8 below 👇 .
3. Register with HMRC
HMRC (HM Revenue & Customs) is similar to the Australian Tax Office (ATO).
This is where you need to register for:
- Corporation tax (mandatory)
- VAT (like GST, but 20% once you reach the company income threshold)
- PAYE (like PAYG)
4. Key considerations for UK employees
If you’re employing people in the UK, you (or your payroll provider) will need to manage:
- Pension (like superannuation in Australia)
- Employees are ‘auto-enrolled’ but can opt out (completely)
- Contribution rate is set in employment agreements
- National Insurance Contributions NIC (like Workcover in Australia)
- All pay-as-you-go tax through payroll
5. What to consider if you’re moving to the UK
If you or a co-founder/team member are planning to move from Australia to the UK to support your expansion, you’ll need to:
- Apply for a Visa if you’re staying for more than 6 months (check the Startup, Innovator, Skilled worker and Global talent visas)
- Consider capital gains tax implications: If you own shares in your startup, the Australian tax system will likely want to take your capital gain before you permanently leave (and your other assets too) so this is where professional tax advice is important (our tax guru is happy to help)
Traditional bank accounts can be difficult to open in the UK because you need a local address and director.
Online banks are usually much easier to set up and more flexible because your customers can pay into a local online account, plus you can also set up company and employee cards. We typically use Airwallex and Wise for online banking.
Then, once you’ve got a local presence in the UK, it’s usually worth opening a traditional bank account as a back up and because this (and a local director) are often required for some capital raising requirements in the UK.
7. Want an Expanding to the UK Guide?
No problem! Here’s one we prepared earlier. It covers all the points in this checklist in more detail, and also looks at funding support, such as the Export Market Development Grant, R&D tax relief and UK startup concessions.
8. Where to get affordable help
If you’d like to outsource the more niggly (and boring!) side of setting up in the UK, we have a service exactly for that. As with all our services, we’ve listed our prices online as much as possible to help make things as clear and transparent as we can.
We also have ongoing UK services to handle your core accounting needs in the UK (bookkeeping, tax, payroll, Companies House compliance) as well as growth services such as financial modelling, valuations and fractional CFO support.
We’re also happy to share our own UK expansion experience, and connect you with other AU-UK founders and key UK connections where we can. Simply connect with us via one of our services, or choose a time for a chat.