Author Archives: Graeme Bursack - Partner

About Graeme Bursack - Partner

T +44 (0)20 7874 8813

Graeme is a highly experienced company advisor with an extensive portfolio of commercial clients in virtually all sectors of commerce and industry. He has considerable experience in the development of new and existing entrepreneurial businesses, and over the years has assisted in the launch of many new business ventures.

Graeme is passionate about recruitment in terms of helping clients find the right talent but also advising those operating in the recruitment sector.

He has advised companies operating internationally throughout his career and is the representative partner of our international association, GMN International. In October 2015 he was appointed to the GMN International Management Committee.

According to research, over a third of Irish companies are looking to expand in the UK throughout 2019-2024 and it remains the priority growth market.

This guide highlights some of the key issues to consider for Irish businesses looking to set up in the UK.

Contents:

  1. What UK structure is best for me?
  2. How easy is it to form a UK entity?
  3. What will I need to open a UK bank account?
  4. What issues do I need to be aware of regarding staff?
  5. What ongoing administration costs should I be aware of?
  6. What is the UK competitor marketplace like? What do I need to be aware of?
  7. What are the business tax considerations for an Irish group expanding into the UK?
  8. What are the VAT implications for Irish businesses expanding into the UK?
  9. What do I need to be aware of re Irish residency status?
  10. Are there any grants I can get from either the Irish or UK to support my expansion to the UK?

 

1. What UK structure is best for me?

We can help you explore which structure is most suited to your requirements – typically, but not limited to, either a UK limited company, a UK partnership or a UK-registered branch of the parent company.

2. How easy is it to form a UK entity?

This is one of the attractive elements of setting up in the UK compared to other jurisdictions. Once you have decided what structure suits your business, the process of setting it up can be very quick. In some cases it can be a matter of days.

3. What will I need to open a UK bank account?

This is an area that can cause delays but having all the relevant identification documentation ready is essential. The documents you are typically asked for are:

  • Two forms of ID, including a photo form such as a passport, for the individual opening the account, or for the director(s) and company secretary (and beneficial owners) if a company.
  • A valid bank mandate form, confirming that you have the authority to open an account on behalf of the business.
  • Signature samples for anyone with authority to use the account.
  • The Company Constitution and Certificate of Incorporation (for limited company only).
  • Evidence of partnership (if you are applying as such). • Certificate of business name (for sole traders and partnerships).

We have found that proper business plans, showing objectives and forecasts are a wise investment, not just for the bank.

 

4. What issues do I need to be aware of regarding staff?

UK employment law is a key area you need to be aware of and you cannot assume that local employment law and practice is the same as that in the UK. In particular you need to look at employment contracts, employment rights and the mandatory pension payments under auto-enrolment.

We can advise on all aspects of bringing Irish employees, directors and partners to the UK including:

  • Difference between Irish and UK social security rules.
  • Payroll tax re secondments.
  • Considering employment tax issues whether they are ex- pats relocating or new employment of locals.
  • Helping employers evaluate the position regarding salary equalisation across countries.
  • Providing HR advice and support including creating staff handbooks and providing interview support.
  • Providing your payroll operation including payroll equalisation and support with P11D compliance.
  • Advising on UK auto-enrolment and pensions issues.

5. What ongoing administration costs should I be aware of?

All structures have operating costs, whether it is a need for an audit or similar reporting requirements. We can guide you through your statutory obligations and provide the necessary assistance.

6. What is the UK competitor marketplace like? What do I need to be aware of?

Setting up in a new jurisdiction is an exciting step but obviously carries some commercial risks. Understanding your competitor marketplace in advance can help to identify those issues and the opportunities and threats.

We can undertake peer review analysis within your marketplace, highlighting key issues, competitors and trends in the UK for your operation. As a reference point for our external data, we use IBIS World, which is used by the major clearing banks to assist in informing their lending decisions. While at the same time, using both your forecasts and reported results, to look at KPIs for your business and provide strategic insight.

We can review your particular market place and highlight key issues, competitors and predictions for the UK operation.

7. What are the business tax considerations for an Irish group expanding into the UK?

You will need to get your tax strategy right from the outset. Given the tax rates in the Republic of Ireland, careful thought and tax planning will be required. Key drivers include; transfer pricing, financing structures and profit repatriation.

Given the differential in corporate tax rates, a defendable transfer pricing policy is a key to profit repatriation.

You will need to look at the consideration of the proposed business model and risk allocation between parent and subsidiary to identify the nature of the return the UK operation should be seen to achieve.

You will need to identify the transactions/inter-company interactions which could be covered by transfer pricing rules.

Ideally you would benchmark to confirm the appropriateness of the inter-company prices charged.

Debt structures

Debt structures should be considered with a view to minimising the risk of tax inefficiency. Not all debt costs are automatically deductible.

8. What are the VAT implications for Irish businesses expanding into the UK?

The extent that the UK does, or does not, remain in the customs union will have a significant impact on VAT obligations. As will the location of the border between ourselves. We can guide you through the alternatives for sales of goods and services as well as providing the necessary assistance in registrations and reporting.

9. What do I need to be aware of re Irish residency status?

Irish residents need to be alive to the issue of inadvertently ending up with dual residency issues which can complicate matters. Make sure you take tax advice before any individuals, whether employees, directors or partners, come to the UK, even for scoping visits.

There are compliance issues to be considered before hand and the opportunity to arrange the individual’s affairs in the most tax efficient way for both the paying entity and the individual themselves. For example, the UK has very detailed domestic residency rules which can either cause problems or simplify matters. It is always more expensive to sort out the historical position.

10. Are there any grants I can get from either the Irish or UK to support my expansion to the UK?

Be aware of the Enterprise Ireland grants which are available for Irish businesses looking to research potential acquisition targets

R&D tax credits

The UK government is encouraging innovation with some generous R&D tax credits that are available to businesses who can demonstrate their UK investment in innovation. This relief can make a huge difference to those setting up in the UK and applies across any industry. For example, we have worked with several property and construction companies to help them to successful R&D claims.

We help Irish businesses and their owners to set up in the UK.

How we can help Irish companies set up in the UK

According to research, over a third of Irish companies are looking to expand in the UK throughout 2019-2024 and it remains the priority growth market. Recently of course, much of that has been driven by Brexit as more Irish companies are looking for a UK resident presence.

We provide a complete accounting, tax consultancy and business advisory service for your business, whether it is setting up a UK subsidiary company or preparing your UK VAT Return for your Irish business or any permutation in between. We help companies navigate the complexities of the UK tax code and model the impact vs the Irish tax level, as well as issues such as employment tax.

If you need a UK personal tax return and personal tax advice then we are well positioned to help. Our individuals and families specialist tax team advise Irish nationals on tax issues of coming to the UK, whether that’s temporary and work related or making a permanent move.

As a firm we are very familiar with advising on complex issues and groups such as family businesses that have grown internationally. We have a strength in property and construction as well as other specialist sectors.

We work closely with Merry Mullen, our sister firm in Dublin and are both active members of the British Irish Chamber of Commerce.

How we’ve helped:

  • We helped a large Anglo Irish construction business with their first and successful UK R&D claim.
  • We worked with an international group who decided it needed a Dublin subsidiary in order to maintain business operations across the UK/EU border.
  • We are the registered auditors for many UK subsidiaries of international groups and produce UK consolidated accounts. We work to international auditing standards.
  • We have provided the financial due diligence for those looking to acquire a UK business.
  • We have guided new UK subsidiary set ups through the complex UK employment requirements and created HR manuals for them.
  • We have helped to recruit staff for UK set ups.
  • We provide benchmarking analysis on the UK market.

Contact

Graeme Bursack or Graeme Blair in London on +44 (0) 20 7388 2444 or gbursack@goodmanjones.com or gblair@goodmanjones.com

Declan Merry or Pat Hoyne in Dublin on +353 1 645 8100 or declan@merrymullen.ie or pat@merrymullen.ie

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We are delighted to have been chosen to be part of the Department of International Trade’s UK Investment Support Directory

The Directory is a smart, new digital tool that makes it easy for investors to connect to private sector expertise.

Here are some comments from the DIT  launch communication;

Minister for Investment, Graham Stuart MP said:

“The launch of the new Investment Support Directory is one of many ways in which DIT is helping to drive investment to every corner of the UK.

We hope this new Directory will be an invaluable resource for investors thinking of setting up operations in the UK.

We are making it easier than ever before for foreign investors to find opportunities in the UK, supported by our network of HMTCs and global experts across more than 100 countries, to ensure the UK remains the number one destination for foreign direct investment in Europe.”

 Mark Slaughter, Director General for Investment said:

“The UK Investment Support Directory is a smart, new digital tool that innovatively connects investors to private sector expertise.

This interactive platform allows investors to tailor their searches to find the specific advice they are looking for or generates a range of businesses if they aren’t sure what they’re looking for yet.

It is another way DIT is helping support foreign investment by streamlining connections between UK businesses and overseas investors.”

Read more on how Goodman Jones can help if you are an organisation or an individual with an interest in the UK.

 

 

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People businesses will face some unique challenges as we prepare for Brexit so I thought it would be helpful to look at how valuable human assets may feel and react to the eventual outcome.

Look beyond 29th March

Although everyone is focused on the 29th March, it is important for businesses to assess the impact that Brexit will have on their longer-term staffing needs. This is because the challenges and opportunities associated with Brexit could result in a skills gap which will, in all likelihood, be both more difficult and costlier to fill.

Businesses will therefore need to make efforts to retain existing staff, as well do all they can to attract and retain new talent. Companies must consider the impact that Brexit will have on freedom of movement, and how this could affect their business.

Helping your employees register for Settled Status

A company’s existing EU employees will need to register for ‘settled status’ (via the Home Office website) by June 2021. Communicating this to your employees and getting them to register now will give both individuals and businesses confidence and certainty about their employees legal status. Given that employees are a major cog in the business wheel, registering for ‘settled status’ will help assuage any fears that EU nationals have, and will also help to identify issues which could result in business disruption.

What about the impact on UK nationals?

Similarly, It is also possible that restriction of movement could impact UK nationals who travel to Europe for work once Brexit takes place. This could well result in increased administration, visa requirements and delays when crossing borders. Businesses should assess the financial and operational impact this could have on them, and plan accordingly.

The Competition for Talent

The competition for talent has been tough for several years, and it is going to become even tougher after Brexit. The UK is already facing a skills shortage in key areas, and it is possible that not only could overseas companies start to target UK nationals, but also that the trend of fewer EU citizens seeking work in the UK will become even more acute. Businesses must be clear that in order to continue to attract the best talent, they must ensure that not only are their remuneration levels competitive, but also that other company benefits, which enhance the company culture, remain attractive. That way businesses stand the best chance of attracting and retaining top talent.

New Skills?,  New Offices?

All the above can result in the need for new expertise around compliance and other impacted areas, which could, in turn, create the need for your business to hire for new skills. You may also need to open new offices in both the EU and beyond, and for staff to speak a second, or even a third, language. All this can be both a costly and time-consuming process, so it is crucial that businesses consider whether their staff will have the appropriate skills once Brexit is upon us. Appropriate training for existing staff will be of some help and is a relatively quick solution. However, recruiting from outside will be more challenging.

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Shore crane loading containers in freight ship

The clock struck midnight…Happy New Year!… and the clock continues to tick towards the 29 March 2019.

With the uncertainty as to what form Brexit will take, and the possibility that we may leave the

EU without a deal, there are 3 actions you need to take now if you import and/or export goods with the EU.  That’s because on the 29 March 2019 there would be immediate changes to the way you trade with businesses in the EU.

The 3 actions you need to take now are:

1. Register for a UK Economic Operator Registration and Identification (EORI) number

If we currently prepare your VAT Returns, we can do this for you.  Or you can do this online at www.gov.uk/hmrc/get-eori. You’ll need an EORI number to continue to import or export goods with the EU after 29 March 2019, if the UK leaves the EU without a deal.  You will also need an EORI number before you can apply for authorisations that will make customs processes easier for you.

2. Decide if you need an agent

Decide if you want to hire an agent to make import and/or export declarations for you, or if you want to make these declarations yourself by purchasing software that interacts with HMRC’s systems. If you want to declare through an agent, you must contact one to find out what information they’ll need from you. If you want to make the declarations yourself, you will need to talk to a software provider to make sure that their software product meets your needs, depending on whether you import, export or both.

3.  Speak to your those who transport your goods

Contact the organisation that physically transports your goods to find out if you will need to supply additional information to them so that they can make the safety and security declarations for your goods, or whether you will need to submit these declarations yourself.

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We were delighted to host the British Irish Chamber of Commerce‘s Christmas drinks reception.


Left-Right:  Graeme Bursack, Pat Hoyne, David O’Reilly of the British Irish Chamber of Commerce and Declan Merry.

In addition to the London based members, we welcomed several guests who joined us from Ireland as well as Declan Merry and Pat Hoyne from our Dublin-based sister firm, Merry Mullen.  We were delighted to welcome, as guest of honour, Counsellor Paraig Hennessy of the Irish Embassy in London.


Larry Phillips, Paraig Hennessy of the Irish Embassy, London with Graeme Bursack.

Katie Daughen, Head of Brexit Policy for the Chamber kept us all captivated with her insights on Brexit.

Graeme Bursack, Head of the International Group said, “With the ongoing uncertainty over what form Brexit will take in just a few months’ time, and particularly the ongoing question of the Irish border, that watchword for business confidence – ‘uncertainly’ – is greater now, than I can ever remember.  Despite good growth in the Irish economy, and a reduction in UK unemployment to the lowest in over 40 years, it remains a critical time for British-Irish trade.  That is why we are so pleased to be working with David O’Reilly and members of the British Irish Chamber of Commerce – to build strong, long-lasting and mutually fruitful relationships between Britain and Ireland.”

Merry Christmas to you all.

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UK holding company with EU subsidiaries?

A very common scenario we see is a UK holding company with subsidiaries scattered across the EU. In this scenario, profits may be paid up by the subsidiaries to the holding company by way of dividend, usually free of withholding tax under EU directives. A similar situation currently exists for certain interest and royalty payments.

 

The threat of withholding tax after Brexit

However, in under a year, the UK will have left the EU. Exactly what arrangements will be in place after we have left are still unknown. But, once we have left, it may well be the case that dividends paid up from EU subsidiaries to a UK holding company may well be subject to withholding tax, (depending on terms of any Double Tax Treaty between the countries concerned). Likewise, maybe, with interest payments, royalty payments, rents and certain other payments.

Review Double Tax Treaties with the countries where you have subsidiaries

Given the high rates of withholding taxes, UK holding companies should review Double Tax Treaties with those countries where subsidiaries are located to consider the potential cost impact of Withholding Taxes being levied. It may be appropriate to consider restructuring operations.

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When an overseas individual or company has decided to set up a business in England*, they will have considered location and logistics, suppliers, rental or purchase of office and production facilities, and a whole host of other practical operational issues.

They will have considered such matters as whether to trade via a company or branch (although they may not know that the status of overseas individuals working in the UK can be different in a UK Limited company compared to a UK branch).  If operations are via a company, they will consider whether that is a UK Limited Company, LLP or some other special purpose vehicle.   They will have considered corporation tax rates, capital allowance, income tax rates, VAT, extraction of profits and double tax treaties.  But employment law is often forgotten, and, if not handled properly, can be both time-consuming and costly if employee relations go wrong.

Easing the burden for business

Earlier this month the qualifying period for unfair dismissal increased from 1 year to 2 years of continuous employment.  That means that for all employees starting employment after 6 April 2012, the employee will not be able to claim that their dismissal was procedurally or substantially unfair in their first 2 years of continuous employment.

This contrasts with other, particularly European, jurisdictions where employers are bound by very strict dismissal procedures and the need for employers to justify their decision to dismiss, once the employees fairly short probation period has expired.

In 2013 further measures are likely to be introduced, which will require the employee to pay a fee for bringing a claim against their employer.  In addition, the government is planning on introducing new rules which are designed to give employers the power to have ‘frank discussions’ with employees.  These will be will be held outside formal ‘performance’ or ‘disciplinary’ procedures,  without fear of facing employee  discrimination claims, and will include talks on underperformance as well as discussions over whether or not an employee should consider retirement.

In addition, there are proposals to cut the length of the consultation period in redundancy situations, to speed up the whole process.

The above changes are all aimed at reducing the ‘red tape’ and easing the burden for businesses in the current economic circumstances.

This all sound like good news for the employer?

Although employers in England will be able to dismiss with less than two years continuous employment without the need to give any reasons or follow any formal procedures, they need to be aware of other areas of the law, and correctly follow procedures so as to minimise the risk of a claim.

This is because employees can claim ‘discrimination’ under the Equality Act 2010.  The act covers nine protected characteristics, which cannot be used as a reason to treat people unfairly. Every person has one or more of the protected characteristics, so the act protects everyone against unfair treatment.  Notice that I use the word ‘people’ rather than ‘employee’ here, because a claim can be brought under this heading even before employment actually starts, ie at the recruitment interview stage!

There are nine ‘protected characteristics’ where discrimination can apply:

• Age
• Disability
• Gender reassignment
• Marriage & civil partnership
• Pregnancy & maternity
• Race
• Religion or belief
• Sex
• Sexual orientation

Looking forward

The new auto-enrolment pension scheme being introduced by the government places additional cost burdens on both employees and employers.  Employers need to cost these into budgets and forecasts.

There are possibly other measures in the offing.  We are currently awaiting the governments’ response to the Modern Workplaces Consultation.  This covers the possibility of flexible working, giving the right to all employees, not just those with young children, to request flexible working (either ‘part-time working’ or ‘working from home’ arrangements).

In summary

This brief sprint through some current employment issues shows that the government has gone some way in reducing the burden of ‘red tape’ faced by businesses.

However, as you can see, the employer setting up in England needs to be well briefed. Policies and procedures need to be clearly set out and followed.  But it is also important to be properly advised, as attention has to be paid not only to current legislation, but also to potential future legislation, and the impact this can have on the UK business.

* Note – ‘England’ includes Scotland and Wales, (but not Northern & Southern Ireland or the Channel Islands, where employment law differs)

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