Articles | Trading in the UK

This quick guide by our tax expert, Philippa Roles, gives an overview of the key issues for overseas businesses to consider when looking to start trading in the UK.

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Philippa Roles

Philippa Roles

If you are an overseas business considering expanding your trading operations into the UK there are a number of issues you will need to consider. Some of the key ones are likely to be:-

  • how should I enter the UK market? Do I: (i) appoint an agent/distributor; or (ii) acquire an existing UK business; or (iii) form a joint venture with another UK enterprise; or (iv) start up on my own?
  • will I need business premises in the UK?
  • will I need people to work for me in the UK, and if so will I relocate my overseas employees to the UK or will I employ UK citizens?
  • if I am importing or exporting goods are there any Customs and Excise procedures I need to consider?
  • what will the tax position be? Will I suffer tax in my home country in addition to tax in the UK?

If you do decide to go it alone, another important consideration is how to structure your UK operations: should you operate through a branch or set up a subsidiary company? 

If you set up a subsidiary company it will have a separate legal identity to your overseas parent company, meaning that there are likely to be different tax consequences. For example, you may find it easier to set-off any losses made or expenses incurred in setting up your UK business if you trade through a branch to begin with, and incorporate a UK company as a subsidiary once the UK business is established. In contrast, UK resident third parties, such as banks, suppliers and customers may find it easier to deal with a UK subsidiary.