Many people consider starting a business while still working full-time. This can be a good method to test the waters of entrepreneurship while still having the safety net of employment.
However, there are some hazards and difficulties to consider before starting a business in the UK. In this article, we will walk you through some of the steps involved in launching a business while still working full-time.
What are the Benefits of Starting a Business while Working?
Most people will not contemplate launching a business while working full-time. If they are happy with their job and their monthly salary, they will have little motivation to devote time and effort to another endeavour. Many people, however, aspire to start their own business and be their own boss, breaking free from regular working hours and a fixed wage.
Making a foray into business while still employed offers some substantial advantages than quitting your job before venturing out on your own.
Engaging the services of a small business concierge can relieve you of a significant amount of stress. An experienced company can help you with your visa, register the company with Companies House and HMRC and also provide you with a registered address for your business.
Aside from the financial demands, starting a business for the first time is often a step into the unknown. Wannabe entrepreneurs do not know whether they are cut out for business until they have had some experience with it.
Starting a business while working allows you to evaluate it out without fully committing to see if it is the appropriate step.
How to Start a Business in the United Kingdom
If you want to start a business in the UK as a foreigner, you must first complete the following steps:
1. Check your legal status
EU residents who lived in the UK before January 1, 2021, may be eligible for the EU Settlement Scheme, but most foreigners will need to apply for a work visa before they can start a business in the country.
2. Fill out a visa application
If you need a visa, you should apply for one ahead of time. Entrepreneurs can apply for two types of visas: start-up visas and innovator visas.
3. Create a business plan
Entrepreneurs in the United Kingdom must have a business plan. This will help you determine whether your business concepts are likely to survive and be long-term viable.
4. Determine your business structure
Before you start a business in the UK, you must decide on the right business structure for your organisation.
5. Choose a company name and address.
If you are a sole trader, you may use your own name. You’ll need a registered address when registering your UK firm for tax purposes and entering the Companies House register.
Only a few businesses are required to register their names; however, others may do so as a trademark to stop other businesses from trading under the same name.
If you’re starting a limited company, you must nominate a company secretary, directors and calculate your shares and draft up a shareholder agreement for your shareholders, create your memorandum and articles of organisation, open a separate bank account, and register for corporation tax.
6. Sign up with HM Revenue and Customs.
You must register your UK business with HMRC for tax purposes. Limited corporations must register with Companies House.
7. Examine any additional rules that apply to your industry.
Depending on the nature of your UK business, additional requirements such as permissions or licences may apply. Check to see if there are any additional regulations to follow in order to avoid future problems.
Business Visas in the United Kingdom
You can start a business, work as a freelancer or be self-employed as long as you have the right to work and live in the United Kingdom. The UK visa options listed below can assist you in your quest to start your own business in the UK.
This visa is intended for individuals who wish to establish a new business in the United Kingdom. If you wish to apply for this sort of visa, you must ensure that your business idea is original and has been approved by an authorised agency.
You must have at least £50,000 in funds available for investment and you must be able to prove where this money came from to be eligible.
You should also have enough money to cover your expenses, and you must also have a minimum of £1,270 in your bank account for 28 days before you can apply for this visa, extend this visa or switch to this visa.
Another prerequisite is that you be able to converse in English at the Common European Framework of Reference for Languages level B2 (CEFR).
The visa is £1,021 and has a three-year validity period. You can extend your visa for another three years if you meet the requirements.
You can apply for a start-up visa if you obtain an endorsement from a UK higher education institution or an organisation that has a history of aiding UK businesses.
You must demonstrate that your business concept is novel, distinct, and has the potential for growth. The application fees begin at £363.
You can stay in the UK for two years with a start-up visa. A start-up visa cannot be extended; however, you can change visas while in the UK.
Global Talent Visa
You can apply for a Global Talent Visa in the UK if you are a leader in academia or research, arts and culture, or digital technology. The application fee is £608.00.
You can work in the UK for up to five years under this category.
Establishing an Overseas Company Branch or Subsidiary in the United Kingdom
Companies House requires foreign companies that want to do business or establish a branch in the UK to register as an overseas company.
If you hold a company in another country and want to open a branch in the United Kingdom, you must complete and submit form OS IN01 to Companies House. The registration fee is £20.
Managing a Business in the United Kingdom
All UK businesses must keep a record of their accounts for tax and auditing purposes. Despite the fact that self-employed freelancers are not required to keep formal accounts, they must keep track of their revenues and tax-deductible expenses.
UK Business Bank Account
Except for sole traders and partnerships, many firms in the UK require a separate UK business bank account. However, it’s a good idea to register a separate bank account to keep accounting processes simple.
For tax purposes, all UK businesses must register with HMRC and file their tax returns.
Any earnings by self-employed sole proprietors and partnerships are subject to taxation. Limited enterprises and foreign corporations with UK branches must register for Corporation Tax. Corporation Tax is charged at a rate of 20% on profits after any deductions or exclusions.
You must also register for VAT if any of the following circumstances apply:
Your anticipated turnover in the following 30 days exceeds £85,000
You had a turnover of more than £85,000 in the past 12 months
Business insurance is necessary in order to comply with the law and protect your company. These are the main types of business insurance in the United Kingdom:
Liability Insurance for Employers
This insurance is necessary for all businesses with workers and covers any claims made by employees who become ill or injured while working for you.
Public Liability Insurance
If you cause bodily harm (including death) or property damage to a third party, PL insurance (public liability insurance) will protect your company from compensation claims and legal fees. PL Insurance protects you both on and off the job site. It can cover legal fees for opposing claims as well as compensation if your organisation is found to be at fault.
Insurance for Professional Indemnity
Professional indemnity insurance, also known as PI insurance, is a type of business insurance that protects you against financial and reputational loss if you make a mistake while working for a client.
Employing Staff in the UK
If you plan to employ individuals in the UK, you must register as an employer with HMRC and obtain employers liability insurance.
Foreign workers with legal authority to work in the UK can be hired by your UK company. When hiring staff, you must observe minimum wage legislation, make required social security, and pension contributions.
Several initiatives that specialise in various areas such as finance, taxation, and business planning can provide guidance and support to your UK business. The cost of launching a business in the United Kingdom varies depending on a number of criteria, however there are several resources available in the form of UK business grants and loans.