Kevin Beare & Co blog

For overseas companies setting up in the UK – “red tape” freeze extended

Paul Beare — Wed, 12 Jun 2013 07:19:16 +0000

Yesterday saw a UK business news article on our website titled ‘Red tape freeze extended‘. It outlines how this would impact British businesses with less than 50 employees. However, I will take this further in context to overseas companies setting up in the UK.

From 2014 potentially qualifying firms will undergo an assessment process to see if they meet the criteria of burdening regulations. UK VAT registration is a common area, which we find just as cumbersome for overseas companies doing business in the UK and the requirements of this. This is compulsorily when the UK turnover reaches £79,000. However in order to obtain registration, this process can be extrapolated due to HM Revenue and Customs conducting extensive checks ensuring the UK operation is bona-fide, and not that of fraudulent activity.

Among other areas is the simplification of record keeping requirements. Earlier this year, HMRC changed the way UK payroll is accounted for. Accurate recording of data through the introduction of RTI Payroll in the UK for overseas companies and UK owned company’s means the payroll data to be sent ‘on or before’ the payment of salaries to the employees is made.

“The Prime Minister pledged further backing for small businesses as he announced that all the recommendations made in a recent report by his Enterprise Advisor Lord Young will be accepted. The Government will make it easier for small businesses owners to access the right advice and support to help them grow.”

These de-regulation breaks will mean the UK continues to remain strong for Foreign Direct Investment – and the ease of doing business here remains competitive once more.

You can read the full article on the Department for Business Innovation & Skills website.

June Inward Investment news between UK and USA

Paul Beare — Wed, 05 Jun 2013 07:47:16 +0000

ECONOMIC INDICATORS

Inward Investment news by country and region

UK

Gross Domestic Product (GDP) in volume terms was estimated to have increased by 0.3% in Q1 2013, unrevised from the previously published estimate.
Consumer Price Index (CPI) annual inflation was 2.4% in April, down from 2.8% in March.
The employment rate for January to March 2013 was 71.4%, down 0.2% from October to December 2012. The unemployment rate for January to March 2013 was 7.8%, up 0.1% from October to December 2012.

London

London’s annual growth in output increased to 0.7% in Q4 2012 from an upwardly revised 0.2% in Q3 2012.
London’s annual employment growth was 3.1% in Q4 2012, the same rate as the upwardly revised figure for Q3 2012.
Annual house price inflation in London was 3.8% in Q1 2013, up from -1.1% in Q4 2012.

USA

Real GDP increased at an annual rate of 2.5% in Q1 2013.
In March 2013, personal income increased $30.9 billion, or 0.2%, disposable personal income (DPI) increased $20.7 billion, or 0.2%, and personal consumption expenditures (PCE) increased $21 billion, or 0.2%.
The US current account deficit decreased to $110.4 billion, or 2.8% of GDP in Q4 2012, from $112.4 billion or 2.8% of GDP in Q3 2012. For the full year 2012, the current account deficit was $475 billion or 3% of GDP, up from $465.9 billion or 3.1% of GDP in 2011.

New York

Private employment rose by 16,200 in March 2013 after a decrease of 16,100 jobs in February.
The unemployment rate fell from 9.1% in February to 8.9% in March.
The Manhattan hotel occupancy rate in March 2013 was 88.5%, up from 86.2% in March 2012.

Euro Zone

GDP fell by 0.2% in the euro area during Q1 2013, compared with the previous quarter.
The euro area seasonally-adjusted unemployment rate was 12.1% in March 2013, up from 12% in February.
Euro area annual inflation was 1.2% in April 2013, down from 1.7% in March.

USA Investments into the UK

ResHydro to launch operations in the UK
Znode opens UK HQ office
Aternity opens UK office
PRA International expands in UK

UK Investments into the UK

Ascot Underwriting opens new US office
BioOutsource opens new facility in Cambridge, Massachusetts

Inward Investment news kindly provided by BritishAmerican Business, which we are a London member.

Doing business in the UK – Google

Paul Beare — Thu, 16 May 2013 15:36:46 +0000

Google is now the latest multi national to hit the world’s media regarding doing business in the UK. It is perfectly legal for a company to organise its tax affairs so that it pays the least amount in the country it does business in – in this case, Google – doing business in the UK.

It may also be seen to be amoral.

However other large US companies adopt similar practices, generating profits in low tax havens – and keeping them there.

In the US such profits are taxable in the US only when repatriated – that is brought back into the US.

To avoid the tax effect (of paying normal US taxes like domestic corporations) Apple has had to resort to borrowing $48 billion to pay back capital to shareholders (rather than using its own cash it daren’t bring back to the US currently) – using its cash held offshore as security.

Oh for a simple rule that they be asked to pay tax on all their worldwide profits, whether repatriated or not.

That might have 2 effects:

A windfall to the US treasury of the tax on that dead money held overseas, by providing a boost to the US economy as the tax generated flows into the US and state coffers (or brings down government borrowings)

More consideration to US companies paying taxes offshore, when such taxes can be offset against US taxes. This might enable them to pay tax fairly(?) in those counties they are doing business in (akin to a sales tax by country?) knowing that such taxes would have to be paid anyway once they become liable to tax in the US on worldwide profits.

We work with overseas companies doing business in the UK from a company formation perspective through to VAT registration and monthly accounting services as well as payroll processing. For further information on doing business in the UK – please get in touch.

May Inward Investment news between UK and USA

Paul Beare — Tue, 14 May 2013 07:22:40 +0000