London sits as king over other UK cities not only because it is the capital of England or its share size. The capital city also ranks among the largest cities in economic ratings. It’s no wonder entrepreneurs frequently think of how to share in the city’s riches through profitable investments.
Just before you venture into a business in London, there are crucial pieces of information you should know to avoid any hassles. Keep reading to discover the five most important things you must know before moving to the UK to set up a business in London.
1. The City Never Goes to Sleep
Are you wondering what that has to do with starting a business in London? Well, many things. First, that should give you several ideas of businesses you can start to serve the ever-busy population. Again, this little information can affect how you structure your business as touching work hours and shifts.
2. Rent is Expensive
If you need a physical office for your business, it would cost you lots of money compared to other cities. The rent of office space in London depends on its location and the kind of property you want. On average, studio properties cost between £1198 and £1,358 monthly in high-end areas such as the City of London, Kensington and Chelsea, and Newham.
A two-bedroom property can cost as high as £2,500 monthly. But you couldn’t expect anything less from the capital city of England and, by extension, the UK.
Meanwhile, there are also areas in London with a more modest renting fee for properties. It would save you lots of money identifying the most cost-effective places to rent a property for your business. You should consult a London immigration lawyer about this before entering the country.
3. Districts Have Their Specialties
You would make a mistake making general assumptions about the city since needs differ with each demographic region in London. For example, Canary Wharf is most notable for financial institutions and businesses, Westminster for finance and media, and Camden is associated with art and street food.
To enjoy external economies of scale, you should thoroughly research different locations to know which one best suits your business setup. Failure to do so can also lead to less patronage.
4. Tax Matters Are not Handled Lightly
A financial publication revealed that London taxes account for 30% of UK economy taxes. That should tell you something about taxes in London. As a potential business owner, prepare for high taxation of your profits. Companies with small profits pay 19% as taxes, while the main rate (businesses with high profits) is 30%.
You would do well not to default on any tax because sanctions can be heavy. These include serving a seven-year prison term, unlimited fines, and, of course, an order to pay all the evaded taxes.
5. You Must Register Your Business
The government in London would not tolerate any business type, no matter how small, to run without duly registering it. As earlier stated, registration helps them keep tabs on the taxable entities, and you already know the consequences of receiving tax evasion charges.
Now that you know this, you can decide the type and category of company you want to register.
6. Employing Natives can be Beneficial
Who you employ in your business matters to how it kicks off. Hiring someone with British citizenship to be at the forefront of customer relations would be a smart move for several reasons.
First, you do not have to deal with immigration issues that accompany bringing foreign workers to work in your country. One such is verifying an employee’s right to work in your enterprise. Fines for such breach can be up to £20,000. Why take such a risk?
Also, you would expect a native to know the traditions of your business locality, making it easy to slot into the environment. Last but not least, hiring a native can help your business have a local appeal, getting you more patronage.
7. London is Strongly Anti-racial
London has become one of the most ethnically diverse cities in the world, having over 300 languages. The city shows a high level of cultural tolerance, and any form of discrimination would attract heavy sanctions from the government. You’ll do well to be careful not to make racist comments or act biased towards any ethnicity during your staffing process.
8. There is a Minimum Wage for Workers
Unlike in many nations where employers fully determine their employee’s wages, businesses in London are law bound to adopt the UK’s National Minimum Wage. You can’t pay anyone less than what the country stipulates. Doing so would attract sanctions from the government, including fines of up to £20,000 for each underpaid employee. Knowing this should help you draw your staffing structure to work within an acceptable budget.
While we agree that setting up a business in the UK can be demanding, there is no denying that returns on investments are also often high. Working closely with a lawyer would also help your business stay in the good books of the law. That settled, there is no limit to which your business can thrive.