THE SCF GROUP HAS BEEN FORMING AND MANAGING UK COMPANIES FOR OVER 25 YEARS FROM ITS LONDON OFFICES

UNITED KINGDOM MANAGED COMPANIES

Synopsis

The United Kingdom is one of the four main European powers together with France, Italy and Germany. Historically, it was also the centre of perhaps the greatest Empire since that of Rome, covering over one quarter of the World’s landmass. However, this dominance ended as a result of two costly World Wars, the succession of the Republic of Ireland and self-determination of the ‘white’ dominion countries of Australia, Canada and New Zealand. Today, notwithstanding Brexit, the UK still remains Europe’s main financial centre, with London being the primary economic, social and cultural centre in Europe but on the other hand it has lost control of virtually all of its indigenous heavy industries to foreign investors and the impact of leaving the Single Market will not be known for a number of years. At the time of writing (early 2018) the country had a population of 67,620,000 (July 2023 est.) second only to Germany with slightly more than 80,000,000 people.

Location – The United Kingdom of Great Britain and Northern Ireland consists of one Main Island which includes England, Wales and Scotland and the small north-eastern part of the Island of Ireland (Northern Ireland). It only has one physical border with the Republic of Ireland but is also in close proximity to northern France, Belgium and the Netherlands. The total UK landmass is 243,610 sq km.

Managed Limited Companies

The United Kingdom is one of the most favoured company management locations within Europe; primarily because of its pro-business stance, lack of bureaucracy, low corporate taxes, and domicile and residence rules favouring foreign permanent residents plus, at least for now, the fact that London is the main business and financial centre for the whole Continent. In addition, although the United Kingdom can provide many of the advantages of a tax haven, both personally and at a corporate level, its extensive double taxation treaty network further creates a strong protection against the anti-avoidance provisions of other countries in a way that no tax haven could dream of! For those individuals willing to relocate to the UK, the SCF Group can also arrange your personal affairs in such a way that often you need only pay UK taxes on remitted income or, if you can live off your existing assets, no UK tax at all and yet fully benefiting from UK tax treaty protection. However, please note there are certain time restrictions and many of the benefits are only available to those not already resident in the UK.

Why register a UK Managed Company?

• UK corporate taxes have been increased to 25% for companies with profits over £250,000.00 per annum. Companies with profits under this sum are subject to a 19% rate.
• UK limited liability companies (governed by the Companies Act 2006) do not need to be capitalised before commencing to trade;
• Companies House (The registration body for all UK companies) is by far the most efficient and cheapest in Europe;
• Legal and Incorporation Fees are a fraction of those in most civil law countries;
• London is Europe’s number one financial centre;
• English is the Mother language;
• World class communications with two major hub airports (Heathrow and Gatwick) in London alone;
• The UK is a centre of academic excellence with some the World’s leading universities including Oxford, Cambridge, the London School of Economics to name a few;
• London is Europe’s primary city;
• Proportionally only the Republic of Ireland has more inward investment from US firms;
• UK bureaucracy and efficiency are far less than in almost all other European countries;
• London is the home to more billionaires and entrepreneurs than any other city in the World;
• London is Europe’s most cosmopolitan city;
• The common law legal system (also used by the United States, Australia, Canada, Ireland and most former colonies) is generally very pro-business and employment laws far more relaxed than on the Continent;
• The UK concept of domicile and residence can afford new non-domiciled but permanent fiscal residents the ability to be taxed merely on a remittance basis at least for the first 7 years;
• The UK has an unparalleled double taxation treaty network;
• The legal documents (known as the Memorandum & Articles of Association) can be pre-apostilled under The Hague Convention and pre-translated into most main European languages;
• Registration of UK companies as foreign branches / succursale / zweignniederlassung will still be governed by the laws of England & Wales (Scotland may also be selected) which is generally considered to be more corporate friendly than that in civil law countries;

Branch registration of a UK company is generally many €1,000s less than if a German gessellschaft mit beschränkter (GmbH) or French société à responsabilité limitée (Sàrl) were formed and capitalized;

Understanding Why and How British Limited Companies register Branch Operations Abroad

All British limited companies are deemed tax resident in The UK unless covered by a Double Taxation Treaty (DTT) – It is a common misconception that UK companies trading outside the UK do not need to adhere to UK domestic company laws. This is not true, ALL British companies need to maintain British accounts, make submissions to the Inland Revenue/Revenue Commissioners and reply to standard statutory enquiries from The Companies House/Companies Registration Office. However, if for example the British limited company has a branch, succursale, zweignniederlassung in Germany then the zweignniederlassung under the DTT will be subject to German taxes but controlled by British laws. Thus, if the UK Company does not trade in UK but has an active branch in Germany only German taxes will apply. In this scenario, the following “options” would be required:

• The appointment of an accountant plus the maintenance of accounts for the German zweignniederlassung’s which must be maintained and submitted to the Inland Revenue at the end of each financial year (The Form is known as a CT600 Form).
• The completion and submission of the Annual Return Form 363 (Included in the Full Secretarial Service)
• The apostilling and translation of the UK limited company legal documents (known as the Memorandum and Articles of Association) into German for submission to the German authorize registering the zweignniederlassung

Using Managed British Limited Companies to trade Directly with Europe

Such companies are used by Continental Europeans because apart from the low cost of registering a UK [Irish limited companies are more expensive but not nearly as expensive as registering a German gessellschaft mit beschrankter (Gmbh)] limited company the UK also has lower corporate taxes (19-25% p.a.) and social taxes. Again, such trading companies cannot be discriminated against in Germany or other parts of the ECU but to be accepted they must show MANAGEMENT & CONTROL in the UK and for example NOT GERMANY. To do this the company must be registered for VAT and be really managed in the UK by, for example, our in-house accountants. This service legally requires us to operate a UK bank account and make quarterly VAT returns to the Government (Customs & Excise). Cost wise, a FULLY MANAGED UK company will cost a few thousand Pounds each year but can save tens of thousands compared to running a German Gmbh or French Sarl.

Anti-avoidance provisions and the benefits of using Managed and Controlled British Limited Companies

Unlike tax havens, it is very difficult for French, German or other investigating tax authorities to discriminate against properly managed British companies for the very simple reason that both are highly respectable European Union countries. The only issues that can technically be raised relate to proving that there is a genuine business reason other than simple tax mitigation – Obviously, this burden can normally be easily satisfied due to the importance and size of the countries involved but it cannot be over-stressed that full and proper management must take place in the UK to derive these benefits.

Companies

Apart from Cyprus, the Republic of Ireland and Malta the UK is unique in using the corporate friendly common law system..

Double Taxation Treaty Network

The key benefit is that the UK has perhaps Europe’s most extensive and favourable tax treaty network and includes treaties with virtually every country in the World that is part of a tax treaty network. However, with the UK’s EU membership ceasing in 2019 the benefits of key EU Directives such as the Parent Subsidiary Directive 90/435 (which avoids any withholding taxes on intra EU dividend payments) and 03/49, which does the same for interest and loans, will sadly no longer be available.

ADMINISTRATION & ACCOUNTANCY SERVICES

The key service offered by the SCF Accountancy & Law is that of a fully managed UK company where-by we can register your Company, act as the daily legal and accountancy administrators, liaise on your behalf with HMRC, Company House, maintain the registered office, company minutes and in fact everything necessary to provide you with a fully functional VAT registered UK limited liability company including quarterly VAT returns, online banking, management and meeting rooms etc. – In fact, our UK services are totally bespoke according to your needs.

Our Range of Fully Managed Company Services

• The appointment of a qualified accountant to act as Company Secretary;
• The opening up of a bank account for your company with access provisions agreed by SCF, the bank and of course the beneficial owners;
• A Full Management Agreement setting out the rights and obligations of all parties;
• The provision of a London registered office address for service of process and official mail;
• The application and obtaining of a UK VAT number for your company;
• The maintenance of all requisite company minutes, ongoing companies’ registration office submissions, annual returns and AGM preparation;
• The annual submission of the Annual Assessment of Tax Form;
• The management of the company’s VAT submissions, payments and VAT reclamations on a monthly or quarterly basis;
• The maintenance of the company’s accounts supported by a quarterly ready for the submission to HMRC including the corporate tax calculation. Accountancy will be maintained in either SAGE or Quick Books format;
• The appointment, if required or appropriate, of auditors;
• Advice on general UK tax mitigation and the company’s maintenance by a dedicated company accountant

Set-Up & Annual Maintenance Fees

Please see separate SCF Accountancy & Law UK Managed Company Fee Quotation

The Fully Managed UK Company & Trading Office Package (Optional Extra)

This Package is identical to the Fully Managed UK Company Package save that it includes SCF providing the day-to-day trading, telephone answering, website management (if required), order reconciliation, invoice issuing and trading office facilities for your UK company operation which can be made bespoke to your exact needs all at a fraction of the cost of setting up and maintaining you own office in London. For more details please contact an SCF Consultant