Starting your own business is an exciting and rewarding journey. Whether you’re launching a small venture or aiming for bigger goals, getting the basics right is crucial. In this guide, we’ll explore some key steps and requirements for new UK entrepreneurs, including how to choose a business name, whether you need to register for VAT, understanding confirmation statements, and the responsibilities of a company director. Company formation for non-UK residents is the same as for residents living in the UK. There are no restrictions on foreign nationals being a UK company director, shareholder, or secretary. You even do not have to live in the UK. However, the company will need to be registered with Companies House in England and Wales, Scotland or Northern Ireland (depending on the location of the company).

1. Choosing a Business Name
Your business name is the first impression customers will have of your brand, so it’s important to choose one that reflects your business vision. In the UK, there are a few legal considerations to keep in mind when selecting a business name:
Uniqueness: Your business name cannot be the same as or too similar to an existing company name. You can check availability using our name availability checker.
No Restricted Words: Some words, such as “British” or “Royal”, require permission to be included in a business name. Ensure your name complies with regulations.
Avoiding Offensive Names: Names that are deemed offensive or misleading will not be accepted by Companies House.
Domain Availability: If you plan to have an online presence, check if your desired domain name is available. Consistency between your business name and domain can enhance brand recognition.

2. Director’s Responsibilities
If you’re setting up a limited company, you will likely be taking on the role of a director. Directors have significant legal responsibilities to ensure the company is run properly and complies with the law. Key responsibilities include:
Acting in the Company’s Best Interests: Directors must act in the best interests of the company, ensuring decisions benefit the company and its shareholders.
Keeping Financial Records: Directors must ensure accurate and up-to-date financial records are kept, and they are responsible for filing annual accounts and tax returns with HMRC.
Paying the Right Taxes: Directors must ensure the company pays the right amount of tax, including Corporation Tax and VAT, if applicable.
Filing Obligations: Directors must file various documents, including annual accounts and confirmation statements, with Companies House and tax return with HMRC. Non-compliance can lead to penalties.
Compliance with Employment Laws: If the company employs staff, directors are responsible for ensuring compliance with employment law, such as paying employees on time, adhering to the National Minimum Wage, and meeting health and safety standards.

3. Do I Need to Register My Company for VAT?
Value Added Tax (VAT) is a consumption tax applied to most goods and services in the UK. Not all businesses are required to register for VAT immediately. Here’s what you need to know:
Compulsory VAT Registration: If your business’s taxable turnover exceeds the VAT threshold (currently £90,000 as of 2024), you must register for VAT with HMRC. If you expect to reach this treshold within the next 30 days, you must register for VAT.
Voluntary VAT Registration: Even if your turnover is below the threshold, you can choose to register voluntarily. This can offer benefits such as reclaiming VAT on business purchases and potentially enhancing your business’s credibility.

4. What is a Confirmation Statement?
Every company registered with Companies House must file an annual confirmation statement. This is a legal requirement designed to ensure that Companies House has up-to-date information about your business. Here’s what it involves:

What It Includes: The confirmation statement updates key company details such as your company’s registered office address, directors, shareholders information, standard Industrial Classification (SIC) codes and share capital.
Filing Deadline: You must file a confirmation statement at least once every 12 months. Missing this deadline could lead to penalties or even the striking off of your company. You can order your company confirmation statement here.

5. Annual Accounts and Tax return
In the UK, companies must prepare annual accounts and a tax return each year. Annual accounts show the company’s financial situation, including what it owns, owes, and its profits or losses.
Filing deadlines: Annual accounts must be filed with Companies House within nine months of the company’s year-end. The Company Tax Return, which is sent to HMRC, shows how much tax the company owes. This needs to be filed within 12 months of the year-end, but any tax due must be paid within nine months and one day after the year ends. Read more here.

Final Thoughts
Starting a business in the UK involves various legal and financial obligations, but with careful planning and attention to detail, you can set yourself up for success. Choose a business name that reflects your brand, consider your VAT registration needs, stay on top of your filing obligations like the confirmation statement, and understand the full scope of your responsibilities as a director.
Taking these steps early in your entrepreneurial journey will help you build a solid foundation for your business. If you’re unsure about any aspect, 1Office UK team can guide you in the right direction.

For any assistance, please contact uk@1office.co.