What exactly will you do for your initial setup fee of £495?
Register your company
Open a UK bank account in your company name
Provide a communal working office and registered domicile for your company
Provide signage at your UK office
Provide you with a telephone with your own number
Provide a telephone answering and reception service
Provide a website (front page) at a domain registered to your company and
Register your company as a VAT vendor should you so desire. This would be dependent on your turnover and type of costs you anticipate.
If I take up your offer to register my company in the UK and to pay you £495 per month retainer, who do I pay and when?
The invoice will be raised by Veal Global Ltd to your newly formed company in the UK. The fee is to be paid monthly in advance on presentation of an invoice, which will be sent to you on the 1st working day of the month. The invoice will be in pounds sterling and will have to be paid in the same currency, irrespective of which company makes payment. Note: Veal Global is not registered as a VAT Vendor.
Do I pay from my company here in SA or is your fee to be paid by my new company in the UK?
This is similar to the question above, so the same comments apply. Note, however, that you will probably wish to trade from the new company and the invoice, if paid by the new company from its bank account, will be a tax deduction in the UK.
What safeguards do I have if you suddenly increase your fee?
Our management contract contains a clause which allows inflationary increases only.
Is there VAT in the UK?
Every company in the UK must register for VAT when the company’s VAT taxable turnover is more than £82,000 (the ‘threshold’) in a 12 month period.
What happens if I don’t pay your fee?
Naturally we shall contact you to ascertain whether or not non-payment is a deliberate act or otherwise. In the event that it is deliberate, we shall consider it as an indication that the contract is cancelled. This is stated in the contract.
What type of company will I have?
In the UK the main types of businesses that can be set up are:
There are others but these are unlikely to apply to you. Our recommendation is that you set up your company with limited liability, as this is similar to that which you probably have in South Africa and is therefore easier to understand.
What responsibilities will I have as a director and owner of the company?
Your responsibilities will be very similar to those that apply in South Africa
What will be my UK business address?
You will be provided with a physical address in Exeter, UK. The full postal address and post code will be sent to you on successful registration of your company with Companies House
Can I close my UK company if I no longer want it? And if so, will there be charges levied?
To close a company there is a very similar process to that which applies in South Africa. There are no charges levied.
What happens if I wish to keep my company in the UK but I no longer wish to use you as consultant/manager?
All you have to do is cancel the contract. Obviously it would be better for both parties if we are given sufficient time to exit gradually, but cancellation can be effected simply by not paying the monthly fee. In this event you will lose:
your telephone number;
your website; and
your registered office.
You must tell Companies House if you want to change your company’s registered office address. If the change is approved, they will tell HM Revenue and Customs (HMRC).
Your company’s new registered office address must be in the same part of the UK that the company was registered (incorporated). For example, your company will have been registered by us in England and Wales, so your new registered office address must also be in England or Wales.
If I cancel this contract, what happens to my telephone number and my website?
In this event you will lose both your website and telephone number.
Who will do my bookkeeping and accounts?
The rules are very similar to South Africa. If you wish to get help with taxation, you can appoint an agent to handle your entire tax affairs.
We will be happy to offer our local services for any task that you may wish to outsource.
Will I need to appoint an auditor?
Not if you are deemed to be a ‘small company’. To qualify for audit exemption as a small company, the company must:
Have a turnover of not more than £5.6 million; and
Have a balance sheet total of not more than £2.8 million.
What statutory returns are involved and is there a fee to be paid each year over and above your fee?
There are two types of return that must be lodged each year, the same as in South Africa. The first relates to financial returns and the second relates to a return that must be sent to Companies House every year, within 28 days of the anniversary of the company’s incorporation.
This is an additional service that we provide should you wish us to do so.
Do I have to have specific information on my letterheads etc?
You must display a sign showing your company name at your registered company address and wherever your business operates. We will automatically do this for you and it is included in our monthly fee of £495.
In respect of stationery and promotional material, you must include your company’s name on all company documents, publicity and letters
Will you market for me or do I have to do my own marketing?
This depends on what you mean by marketing. Our definition of Marketing is “the action or business of promoting products or services, including market research, advertising and branding.” Consequently we leave this to you. In our opinion, marketing should be left in the hands of the experts but we do work with a local professional marketing company who will handle this on your behalf but this cost will be for your account.
Will you actively sell my products, and if so how much will you charge for this?
It is likely that when you first open your company you would like to test the waters before employing active salespeople. Consequently we will certainly do this on your behalf for a commission. The commission rate will depend on the type, the retail price and the size of the product.
How do I determine my price for the UK market?
This is largely the same process as that which you adopted when establishing your price in South Africa. You will take into account the cost of manufacture, shipping (incl insurance), UK import taxes, delivery costs and distributors (sales) commissions. We will certainly assist you with this if you wish to make use of our services in this regard.
If I wanted to ‘warehouse’ my goods, how would the rent be paid and who would oversee the arrival and dispatch of goods?
There are clearly two parts to this question. The first relates to the warehouse itself and naturally the cost will depend on the size and the geographical location. Although we will be able to guide you in this regard, nevertheless the costs will be for your own account. The second part relates to the ‘human’ element and this will be the responsibility of the salesperson that you employ. If you make use of our services for selling, this will be covered by the sales commissions we would earn.
Will I be able to send ‘samples’ to you?
Yes, provided they can be contained in an office and no real storage space is required. If your products are larger (they might be flat packed or in CKD for example), you will have to rent additional space. Naturally we will source this for you as part of our service.
If I employ a salesman in the UK, to what extent will you oversee his activities and if so how much will you charge for this?
If, for example, you employ a salesman (probably working from his/her own residence) who operates from an area a long way from the office it is unlikely that we will be able to ‘manage’ that person in the traditional sense. On the other hand, we can demand and evaluate performance data and provide ongoing management information to you. The amount of oversight that you wish us to carry out will determine our fee, but it will be variable based on turnover. If there are no sales, there will be no fees.
I have buyers in certain parts of Africa. Will I be able to invoice in US Dollars? If so, will I be able to bank and retain US Dollars or do I have to convert them to pounds?
There is nothing to prohibit you from invoicing in USD, nor from having a bank account in USD. However, for the purpose of accounting, you will have to convert all turnover (and cash) into pounds sterling when lodging your returns with the UK authorities.
If my products need to be assembled, will you do this for me? And if so how much will you charge?
This depends on what you mean by ‘assembled’. If large goods are shipped in CKD format it is unlikely that we will be able to do this for you. It is, however, likely that we will be able to source an assembler for you provided that assembling will not require specialist technicians. If they are ‘flat-packed’ and not too large, in all probability we can do this on your behalf.
Does the UK make use of ‘provisional tax’ regulations similar to South Africa?
No. Tax is only payable after the financial year of the company. At the end of its financial year, your limited company must prepare full (‘statutory’) annual accounts. You then use this information to:
File annual accounts with Companies House 9 months after your company’s financial year ends;
Pay Corporation Tax 9 months and 1 day after your company’s financial year ends;
File a Company Tax Return 12 months after your company’s financial year ends
Will I pay less tax in the UK and if so how does it compare to South Africa?
You will pay 30% less tax on your profit in the UK.
In South Africa, the current corporate tax rate is 28% unless a business meets certain qualifying requirements and is registered as a small business corporation (SBC) in which case there are certain incentives on low profit levels.
In the UK, the tax rate is only 20% so shareholders automatically save almost 30% of the tax which would otherwise be payable in South Africa.
How do I recover my profit?
As a non-resident shareholder, you can only recover money through the dividends mechanism.
My whole family is South African. To what extent can I use my company in the UK to offer employment and residence for my family?
When you have built assets to the value of £50,000 you will be eligible to apply for a Tier 1 (Entrepreneur) visa, which will entitle you to take your whole family to live in England. And if you have a business partner, you can form an ‘entrepreneurial team’ and share the same investment funds.