Doing business in the United Kingdom

The UK is one of the Netherlands’ main trading partners for both imports and exports. Larger companies as well as SMEs can benefit from the opportunities offered. Below we give some important information and tips about doing business in the UK. You can always contact the economic team for further queries or advice.

For any questions about doing business with the UK after Brexit, please refer to the Dutch government’s Brexit desk.

International companies that are thinking of establishing operations or expanding existing operations in the Netherlands can get assistance from the Netherlands Foreign Investment Agency (NFIA).

Why do business with the UK

The UK is one of the main trading partners for Dutch companies. What makes the UK so interesting?

  • With a population of over 66 million, the UK is a big potential sales market.
  • The UK is easily accessible from the Netherlands.
  • The language barrier is relatively small.
  • The UK and the Netherlands have a similar business culture.
  • There is a long history of cooperation between the UK and the Netherlands and many Dutch companies already do business with UK partners.
  • The Netherlands is among the UK’s top 5 import and export partners.

Exporting and importing

If you are looking into the possibilities for doing business across borders, the Chamber of Commerce (KvK) will be pleased to help you. You can also find a lot of information on the Ondernemersplein website. This is a partnership between Dutch government bodies, aimed at helping businesses do business internationally.

If you have specific plans for doing business with the UK, the Netherlands Enterprise Agency or the Embassy’s economic team will be pleased to help you. We can help you by for example providing market information or access to our local network.

Customs

If you are planning to export to the UK you may need to have documentation showing that you meet certain laws and regulations. You often need different documents depending on whether you are exporting to countries within or outside the EU. The Chamber of Commerce (KvK) can tell you what export documents you need.

You can use the Brexit Impact Scan to check how you can prepare for changes in customs procedures as a result of Brexit.

Taxes

VAT

As long as the UK remains a member of the EU, the VAT rate for goods is 0% if both sender and recipient are VAT-registered. In the case of services, VAT liability is shifted to your client.

If you are supplying goods or services to customers who are not registered for VAT purposes (such as consumers), you do have to charge VAT, except for certain goods which are exempt. The Netherlands Enterprise Agency or the Dutch Tax and Customs Administration can provide more information.

The European Commission website provides information on the VAT registration numbers of parties in the UK. Here you can check whether your customer is actually a VAT-registered trader.

Under current VAT policy, an EU company engaged in distance-selling to the UK only needs to register for UK VAT if the value of its sales to the UK exceeds £70,000 per year. Distance-selling means:

  • You are not established in the UK but in another EU country.
  • You sell goods to customers who are not VAT-registered (such as consumers and businesses with a small turnover).
  • You supply the goods yourself or arrange the supply of the goods.

Unless the UK and the EU make new arrangements, the distance-selling arrangement will no longer apply for EU companies after Brexit. They will instead become overseas sellers. Overseas sellers must always register for UK VAT.

You can usually register for VAT online with Her Majesty’s Revenue & Customs (HMRC), the UK tax authority. The application process is in two stages. First you must open a Government Gateway Account. Once you have an account, the process of applying for a VAT registration number is started automatically. Some types of business cannot register with HMRC online. They can download and print the registration form and send the completed form by post.

Once you have obtained a VAT registration number you can create an online HMRC account. The application procedure usually takes about 30 working days, but in some cases longer. Please go to the UK government’s website to find out more about paying VAT in the UK.

You can use the Brexit Impact Scan to check how you can prepare for changes in VAT policy as a result of Brexit.

Corporation Tax

Any company trading in the UK must pay 19% corporation tax over its profits. In 2020 the rate will be 17%. Companies are required to pay this unprompted: no assessment is sent. In order to pay the corporation tax, you have to register your company with HMRC, keep accounts and prepare a company tax return. The corporation tax must normally be paid no later than 9 months and 1 day after the end of your accounting period, or you must have reported that there is no tax to pay. Your accounting period is normally the 12 months of the financial year covered by your annual accounts.

Your company must submit a company tax return if you receive a notice to deliver a company tax return from HMRC, even if you have made a loss or do not need to pay any corporation tax. In this case you must submit the company tax return to HMRC within one year. This deadline is longer than the deadline for paying corporation tax. 

Please go to the UK government’s website to find out more about the rules on corporation tax.

Product standards

Within the EU, statutory safety, health and environmental requirements for products have been streamlined to a high degree. The CE label is an example. If your products meet all the EU statutory requirements they may be freely traded in all EU member states. If your product is not covered by specific EU legislation, it may still be freely traded if it complies with all the Dutch statutory requirements. However, individual member states can set requirements for the language on product labels and instructions for use.

While use of the European standards is not usually mandatory, compliance is recommended. EU standards are set by the European Committee for Standardization (CEN), the European Committee for Electrotechnical Standardization (Cenelec) and the European Institute for Telecommunications Standards (ETSI).

The Netherlands Enterprise Agency provides more information on product standards that apply in the UK.

You can use the Brexit Impact Scan to check how you can prepare for changes in product requirements as a result of Brexit.

Setting up a business

Setting up a business in the UK is fairly straightforward, provided you have an address there. You only need to register your company if you have a physical presence in the UK, not if you are only importing or exporting.

The UK’s Department for International Trade (DIT) provides detailed information on every aspect of setting up in the UK.

Legal Form

If you are setting up a business you will need to choose a legal entity. You can opt for a limited company (Ltd) or a limited partnership (LLP). The limited company is the form most often used by foreign entrepreneurs establishing a business in the UK. It is comparable to the Dutch besloten vennootschap (BV). A limited company has one or more owners/shareholders, whose liability is limited to the amount of capital they invested.

It is also possible to set up a Limited Liability Partnership (LLP). With this legal form the business is run by two or more partners. Another company can also be admitted as a corporate partner. Each partner pays tax over their share of the partnership’s profits but is not personally liable for the partnership’s debts.

You can find more information on the UK government website.

Registering in the register of companies and with HM Revenue and Customs

Limited companies have to be registered with Companies House, which maintains the UK’s register of companies. This is generally done fairly quickly – in some cases even within 24 hours. Companies House ensures that information about newly-formed and newly-dissolved companies is accessible to the public. You must notify Companies House whenever any significant changes occur in regard to your company/partnership.

Once the limited company has been formed and registered with Companies House it must also be registered with HMRC, the UK tax and customs authority. This can also be done online.

An LLP must also be registered with Companies House and with HMRC for self-assessment of tax.

Self-employment

A self-employed person is known in the UK as a ‘sole trader’. As a sole trader you are personally liable for any losses your business makes. If your gross income from trading exceeds £1,000 in a given tax year you have to register as self-employed. If your turnover is more than £85,000 a year you also have to register for VAT.

The UK government’s website provides more information on setting up as a sole trader. You are welcome to contact us. We will be pleased to help you.

Opening a business bank account

If you want to do business in the UK you may need to open a UK business bank account. Each bank has its own procedures but in general you will need to bear the following in mind:

  • You must have an address in the UK. It can be a company/partnership address or the residential address of yourself or a member of staff.
  • The application will be dealt with by the bank’s central inward investment banking team. It often is not possible to open an account through a local branch.
  • A representative of the company/partnership must personally sign an account opening mandate.

The UK government’s website provides more information on opening a business bank account.

It’s also handy to check out Business Banking Insight, where you can easily compare a range of business banking products, including accounts, credit cards and loans.

Financial support and advice

The UK government operates a number of schemes to support UK-registered businesses financially (grants, soft loans and guarantees) and provide them with advice. The Department for Business, Energy & Industrial Strategy (BEIS) maintains a comprehensive list of funding opportunities, broken down by region.

We recommend that you also check out Great Business, which provides a good overview of support available for new ideas and innovations.

If your business has existed for less than two years, you can also apply for a startup loan backed by the UK government. To qualify you must however be resident in the UK.

You can check your trading partner’s creditworthiness in the Guide for creditors. And Pay on Time gives you advice about how to make sure you receive payments on time. You should also prepare yourself for doing business in pounds sterling and take account of possible currency risks.

Tenders

The UK government’s Contracts Finder has a comprehensive list of current public contract opportunities (tenders). Go to the website for more information about current and upcoming contract award procedures in specific market segments.

Staff

The UK is currently still part of the EU. That means there is free movement of workers, so you can deploy your Dutch staff in the UK.

The UK government’s website provides detailed information about taking on staff in the UK and the rights and obligations of employees.

It is not yet clear what the rules will be for employing staff from the EU or third countries after Brexit. The Dutch government’s Brexit desk provides the most up-to-date information and tips for preparing for Brexit.

Data protection

Any company in the UK that uses or stores personal data must comply with the UK’s data protection rules. This includes, for example, information about employees, customers and account holders. The UK legislation is identical to the EU’s General Data Protection Regulation and will continue to apply after Brexit.

You must ensure that personal data you hold is up-to-date and securely stored. You must also tell everyone whose information you hold how you use that information and whether you share it with third parties. You must tell the Information Commissioner’s Office (ICO) how you use the personal data. If someone wants to know what personal data you have about them, you need to give them access to that information.

The UK government’s website provides more information about data protection in the UK.

Intellectual property

There are various types of intellectual property and not all of them are treated the same way in the UK. Sometimes protection is given automatically, as in the case of copyright and design right. At other times, protection needs to be applied for specifically, as in the case of trademarks, registered designs and patents. IP Equip is a free online course provided by the UK government to give you a quick overview of the various types of intellectual property that may be relevant to you.

The UK government’s website provides more information about UK rules on intellectual property and submitting applications.

You can use the Brexit Impact Scan to check how you can prepare for changes in regard to intellectual property as a result of Brexit.

Corporate Social Responsibility (CSR)

The OECD Guidelines for Multinational Enterprises specify what the Dutch government (and the 45 other countries in the OECD) expects of internationally operating companies in regard to responsible business conduct.

The guidelines outline how companies should deal with issues such as supply chain responsibility, human rights, child labour or the environment. By complying with the OECD Guidelines you make your business more transparent and run less risk.

The CSR Risk Check is intended for entrepreneurs who purchase, export or manufacture goods outside the Netherlands. After doing the check you will know what your international CSR risks are and how you can reduce them.

The UK Modern Slavery Act has been in force since 2015. It obliges all businesses with annual turnover exceeding £36 million to publish a statement for each financial year, stating the steps they have taken to ensure that slavery, involuntary labour and human trafficking are not taking place either in their own business operations or in their supply chain.

This means that you may be asked to issue such a statement if your business is part of a large UK company’s supply chain. Both the UK and Dutch governments are also encouraging smaller businesses to publish a slavery and human trafficking statement.

You can find more information about the Modern Slavery Act and the statement in these UK government publications: Transparency in Supply Chains and the Modern Slavery Business Pack.

If you have a specific question or cannot find the information you are looking for, you are welcome to contact the economic team by e-mail.