What are the costs of opening a business in the UK?

For centuries, the United Kingdom of Great Britain and Northern Ireland has been attracting foreign businessmen as a perfect place to start a new business or open a representative office of a foreign company. Registration process is simple, costs of running a business is relatively predictable if everything is done in a lawful and timely manner. However, if you come from outside the UK and plan to set up a company here, you would be interested to know how much you could be spending.

UK business: what is its purpose?

It is always good to know your expenses beforehand, but when setting up a business in the UK you would only know the final total when you are nearing the end of the registration and setup process.

Our team has been helping clients from all over the world relocate to the UK and open their company here. It is quite impossible to break down all the costs involved in registering a firm and paying associated charges, because there are so many scenarios. However, we asked Vasily Kluev, Account Manager from Imperial & Legal to talk to us about main costs of opening a company in the United Kingdom and about service packages that they offer.

How much would it cost to start a business in the UK?

If a new company does not plan to conduct any activity and will be dormant, then your costs will include only registration and company secretary if you need one.

Basic package

Imperial & Legal offers a Standard Package starting from £285 which is ideal for dormant companies. It includes:

• Checking company name for uniqueness;
• Preparing necessary documents and forms;
• Submitting application to the Companies House, obtaining a certificate of incorporation and other registration documents;
• Providing a registered address for 1 year from the date of incorporation;
• Serving as a company secretary for 1 year.

If your UK company will be active, costs of running a business will increase dramatically.

All-Inclusive package

A trading business should go for the Imperial Package starting form £3800 in the first year and £2500 in the subsequent years. What’s included?

• Providing correspondence address in London with access from anywhere in the world;
• Providing landline phone number if needed;
• English-speaking secretary (other languages upon request);
• Assisting with opening a UK or European bank account;
• Providing correspondence address for a bank;
• Regular consultations with company’s experts;
• Registering a company for VAT;
• Applying for business visas for 2 people.

Other costs

If your new business will have presence in the country, you might as well add the following costs.

Rent or purchase of an office and/or warehousing and production facilities

Price will depend on the location and square footage. If you lease an office, you will also pay business rates and utility bills.

Salary, taxes and social contributions

Only if you employ staff. When British say salary, they mean gross annual salary that includes income tax. Social contributions are calculated on top of that.

Licences and permits

Only if required so by regulation authorities, if your business is regulated. It normally works as an annual subscription.

Insurance

It can be Employer’s Liability Insurance if you employ staff. Or, if you deal with clients on your premises or have a shop, you must have a Public Liability Insurance.

Marketing

Never underestimate this type of expense, especially if you start a new business and goods or services you offer are not known in the market. It is also important if you have a huge competition and the market for your product is oversaturated.

Starting a business in UK with Imperial & Legal

We have managed to cover only main types of expenses for opening a business in the UK as applied to three scenarios: a dormant company, a trading company without UK presence and a trading company with presence and employees in the UK.

Our experts offer full support in setting up and managing your business in the United Kingdom including costs and tax optimisation.