SEMINAR BEST PRACTICES FOR SPANISH COMPANIES DOING BUSINESS IN / WITH THE UK IV EDITION

In collaboration with

AGENDA
Welcome Welcome to London! Dont get into trouble with the Taxman - Steven Bruck, Blick Rothenberg

You need a lawyer! - Philip Shepherd, Taylor Wessing Getting Up & Running - Staffing Options for the UK market- Tim Soar, Interim Management Answers Coffee break Great PR, High Expectations - Joanna Dodd, Rochester Group

Banking in the UK, Sergio Espinosa, BBVA

Case studies and panel debate Juan Urdiales, Cofounder, Jobandtalent Philippe Gelis, CEO, Kantox PeerFx Mike Byrne, UK Sales & Operations Manager, Netex Networking lunch
In collaboration with

Blick Rothenberg

Welcome to London! Dont get into trouble with the Tax man!
Steven Bruck

27 November 2012

Typical Scenarios
Spanish business selling into UK
Somebody in the UK researching the market (early stages) Local representative talking to prospective customers chasing orders taking orders Local sales/distribution office full scale support, maybe extending to servicing Local manufacture/design & build

At each stage think UK tax

What/which taxes?
VAT
Employee PAYE/NIC Corporate taxes

VAT Spanish business selling to UK

Simple Case:
General rule:

Supply of goods from Spain directly to UK business customer

No UK VAT registration needed UK business customer should account for VAT under EU acquisition (reverse charge) rules

Spanish business quotes UK customers VAT number on its sales invoice and a clause Reverse Charge.

Note:

Spanish business selling services to UK personal consumer; Spanish VAT will normally apply

VATcontinued.COMPLICATIONS
Delivery made from UK stockholding; Currently VAT registration needed only if turnover exceeds 77,000 (in 12 month consecutive period)
But from 1 December 2012 non UK established businesses will lose the 77,000 threshold. (Blame the EU!)

Delivery from Spain to UK consumer (not business); Currently UK VAT registration required under distance selling rules if UK turnover exceeds 70,000
Services supplied to UK business customer from Spain; No UK VAT registration required for most services (reverse charge by customer), but check exceptions to basic rules

VAT.continued
So a Spanish business selling products to the UK may need UK VAT registration. Indeed from 1 December 2012 much more likely
UK VAT follows EU law (should be familiar)

VAT registration does not necessarily create a permanent establishment

VAT registration separate from corporate taxes

Now you have an employee

Let us move now to a situation where you have a person or people in the UK Lets talk about employee taxes: PAYE And National Insurance Contributions: NIC

Employee Taxes
Pay As You Earn = PAYE & NIC UK has system of withholding income tax and national insurance (social security) contributions (NIC) from employee salaries Paid over monthly by employer, with employers NIC, to Her Majestys Revenue & Customs (HMRC) So if you have an employee you must think about PAYE and NIC Form A1 can exempt employee and employer from UK NIC (EU nationals)

Employee Taxes.continued
General rule:
In general PAYE/NIC deductions and payments are needed for all employees Heavy potential penalties for non compliance Payment of benefits/expenses strictly controlled

Employee Taxes.continued
Exceptions:
1. One employeeno place of business; If employee is resident in UK, then taxable on employment income BUT, if no place of business or host company, no PAYE requirement, (taxable under self assessment) Potential cross border social security issues may also apply Be careful take advice; dont assume this applies once you are seeking/taking orders

Employee Taxes.continued
Exceptions:
2. Self employed personnel HMRC require strict evidence of self employed status, which can often be challenged Level of control, existence of other clients, detailed terms of contract all crucial Not an easily obtained option

Employee Taxes.continued
Exceptions a warning
Please take advice if you wish to take advantage of exceptions

The potential penalties for omissions (even innocent) can be high

Benefits and expense payments are carefully monitored by HMRC (annual P11D return required) and benefits are taxable Forms 42 where shares issued to directors or employees

But good news

Potential favourable treatment for expats (detached duty relief, overseas workday relief and forms A1)

Employee Taxes etc. - Rates

Income tax Tax free 1 - 34,370 34,371 - 150,000 Over 150,000 NIC: weekly 2012/13 Up to 146 146 - 817 2012/13 8,105 20% 40% 50% Employee Nil 12% 45% Employer Nil 13.8% 2013/2014 9,205 Basic rate threshold reduced to 32,245

817 +

2%

13.8%

Employee Taxes.... above all

Dont assume Im paid in Spain under Spanish contract so UK PAYE is irrelevant.

Its not that simple!

You have a UK presence What about Corporate Taxes

Normal alternative structures;
1) UK Limited Company (a subsidiary or personally owned) 2) Spanish company with a UK permanent establishment

(including a branch)

General Rule UK Corporate Taxation

1) UK Limited company:
Subject to UK tax Unless; Non-Resident = managed and controlled outside UK (Spain OK) Non residency must be demonstrated/agreed

General Rule UK Corporate Taxation

2) Overseas company or business
Subject to UK tax if either a) Resident = managed and controlled in UK, or

b) Has a Permanent Establishment in the UK

So what is a Permanent Establishment?

What is a Permanent Place of Business?

A Permanent Establishment is a fixed place of business
Fixed place can be a home Business what is business?

If it looks like a duck and quacks like a duck, it probably is a

duck!

What is business?
Spanish business selling into the UK
- No One person in UK solely researching the market - No One person in UK talking to customers, promoting orders - Yes But perhaps a grey area Local sales/distribution office

- Yes Local manufacture/design & build - Yes -

What is business?
So, as you move from pure market research to actively developing business in the UK (even without a Ltd) remember you may have a permanent establishment you may be subject to UK corporate tax
This is not a matter for election/choice. Take advice 12 month rule for construction/installation contractors

How much profit must be shown/taxed?

Even for a UK Limited company, taxable profits are not necessarily accounting profits
Arms length principle crucial unless exempt If applicable - taxable profit is the profit which would arise in an equivalent independent third party entity

Arms Length principle

Depends on:
Extent and nature of activity Level of risk Overall profitability of enterprise Burden of proof is on taxpayer

Arms Length principle how is profit calculated?

Minimal commercial risk; introducing customers; contracts signed in Spain;
Potentially cost plus Contracts signed in UK; bad debt risk; perhaps stockholding risk; potential trading losses; Gross margin on an arms length commercial basis

Arms Length Principle - Exemptions

The good news
World-wide groups which are small are normally exempt Small: Maximum of 50 staff and either; Group turnover less than 10m, or, Gross balance sheet assets less than 10m There are also medium sized group relaxations; this gets more complicated take advice

Corporation Tax Rates

2012/13
Up to 300,000* 300,000 - 1.5m 1.5m* + 20% 25% 24% (23% from 1 April 2013, 22% from 1 April 2014).

* 300,000/1,500,000 divided by number of companies under common control

Taxable profits
Taxable profit requires adjustment to accounting profit.
e.g: Capital allowances v depreciation General provisions

Entertaining expenditure
But thats for another conference

Conclusion
The UK is still a good place to do business
But as you move through the various stages of establishing a business in the UK be alert

Contact us

12 York Gate, Regents Park, London NW1 4QS, United Kingdom Telephone: +44 (0)20 7486 0111, Fax: +44 (0)20 7935 6852 Steven Bruck Tel: +44(0)20 7544 8970 Email: steven.bruck@blickrothenberg.com

SEMINAR BEST PRACTICES FOR SPANISH COMPANIES DOING BUSINESS IN / WITH THE UK IV EDITION
In collaboration with

You need a lawyer!

Key legal issues for Spanish companies doing business with and in London

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Philip Shepherd 27 November 2012

Taylor Wessings legal services to Spanish companies setting up and doing business in the UK include
> Free of charge, free of obligation initial calls and meetings
> Fixed fees > Co-ordinated advice from the leading law firm for investment and start-ups in the UK > UK team of over 40 lawyers dedicated to helping overseas companies setting up and doing business in the UK > Offices in Central London and Tech City

London and the UK a great place to do business

> Ease and cost of establishment

> Capital and funding, capital markets

> Entrepreneurial and Tech clusters (Tech City, London) > Relatively light employment regulation > Legal system > Professional services

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International Expansion
> Risks
More risks (some bear traps) More risks means more cost, probably less profit? INSERT IMAGE HERE
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> Reducing the risks

-

Increase the profit by reducing the risks

Its easy and inexpensive to address the risks in the UK (you need a lawyer) This is an opportunity

Best Practice Seminar for Spanish Companies Doing Business with or in the UK
> Doing business with the UK - Selling into the UK directly from Spain - Selling in the UK via agents, distributors or partners > Doing business in the UK - Establishing a presence here (i.e. hiring employees in the UK or sending employees to work in the UK)

Doing business with the UK

> Contracts and terms of sale - Differences between Spain and the UK
Remember it is different local law may override Choice of law and jurisdiction and style of document customer preference (culture and language) Consumer laws (eg cookies and cooling off periods)

- Typical mistakes
No English law review, parts of contract unenforceable = liability No contract at all

- Principles
Remember it is different and take local law advice Generally what you see is what you get but there are exceptions Costs versus risk

- Costs and timing

Inexpensive and quick

Doing business with the UK

> Intellectual Property - UK IP protection
do you have a UK trade mark? local non-disclosure agreements? other IP?

- Typical Mistakes
No local protection in the UK Contractors own the IP

- Principles
Remember it is different and take local law advice English law contracts and nondisclosure agreements needed

- Costs and timing

Inexpensive and quick

Doing Business in the UK: setting up and growing

> Entity and method of trading
> Employees > Regulation (including data protection and the Bribery Act) > Real Estate
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> Intellectual Property

> Contracts > Others

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Doing business in the UK: Entity

UK Entity
> General principal: if you have employees in the UK you need a local entity - company law - tax planning - commercial advantage > UK subsidiary (private limited company) - the most popular with overseas companies setting up in the UK - very quick, cheap and easy to set up - customer advantage? > UK establishment of the Spanish company - a lighter form of entity - quicker to close and (sometimes) less expensive to operate - customer disadvantage?

Doing business in the UK: People

> Employment law it is different > Some points to watch out for: - Contractors (can be dangerous) - Employee Shares - Immigration - Acquired Rights Directive applies (known as TUPE) > Employment documents - You need local English law documents to protect the company. For example:
contracts, offer letters, confidentiality and IP Protection agreements employee handbook (note: Bribery Act compliant)

Summary: Yes, you need a lawyer but it is easy to do business with and in London.
Questions?
Philip Shepherd pjh.shepherd@taylorwessing.com Tel +44 (0)20 7300 4655

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Dedicated to inward investment great quality and responsiveness and at reasonable fees Taylor Wessing LLP Client

Taylor Wessing 2011 This publication is intended for general public guidance and to highlight issues. It is not intended to apply to specific ci rcumstances or to constitute legal advice. Taylor Wessings international offices operate as one firm but are established as distinct legal entities. For further information about our offices and the regulatory regimes that apply to them, please refer to www.taylorwessing.com/regulatory

Seminar: Best Practices for Spanish companies doing business in / with the UK IV Edition

In collaboration with

Getting Up & Running

Staffing Options for the UK Market
27th November 2012

Tim Soar Europe & Latin America Director

Agenda

The Secret of Good Recruitment

Recruiting Options Other Resourcing Options How IMA Supports Clients Contact Details

The Secret of Good Recruitment

Get the job description right what is the employee going to be doing each day? What value is the role in the business? Ensure you create a Company and job focused sales story which is going to attract candidates Work with the recruiter to identify:
the type of individual you want - experience, behavioural profile and qualifications what job title they may already have companies they may be working in the personality profile which will fit your business

The Secret of Good Recruitment

Benchmark remuneration and make sure youre offering a competitive package (eg. Basic + bonus + car + pension + life cover + health) Ensure you dont break any discrimination laws (age, sex, race, disability)

Have a proper timetable of when, where and with whom interviews are going to take place remove any delays in the process

Recruiting Options
Recruit yourself using companies like Monster and/or own website cost circa 400 Advertise yourself in trade publication cost 500 to 1000s Work with contingency based sector specific or function focused database driven recruiters cost 10-20% of salary (can be calculated on base salary or package) Traditional Executive Search cost 25-35% of salary (can be calculated on base salary or package)

Cost
Low

High

Recruiting Options
Recruit yourself using companies like Monster and/or own website cost circa 400 Advertise yourself in trade publication cost 500 to 1000s

Level of success
Low

Work with contingency based sector specific or function focused database driven recruiters cost 10-20% of salary (can be calculated on base salary or package) Traditional Executive Search cost 25-35% of salary (can be calculated on base salary or package)

High

Other Resoucing Options

Interim Resource Senior, function and industry specialists who have a track record and skill set of delivering a wide array of client requirements Interim Managers can be used on a part time or full time basis
Consultancy
P r e p a r e

Interim Management

H a n d O v e r

Permanent Employment

Deliver

Mentoring Working alongside your own resource to advise on UK specific issues, support decision-making in UK market and allowing your resource to focus on their job

How IMA Supports Clients

Delivering outsourced HR and recruitment Helping clients focus on their core business by ensuring their messaging and market approach is correct Providing specialist Project Managers to answer complex tenders, H&S guidance etc Delivering Interim Management support (the costs can be of typical consulting fees) Providing function and industry-specific mentoring to avoid mistakes being made in the UK

Contact Details
IMA Bishops Walk House 19-23 High Street Pinner Middlesex HA5 5PJ Office: 020 8966 9222 Fax: 020 8966 9444 Web: www.managementanswers.co.uk

Tim Soar Europe & Latin America Director tsoar@managementanswers.co.uk Mobile +44 (0)7789 930975

Seminar: Best Practices for Spanish companies doing business in / with the UK IV Edition

In collaboration with

Running order
Brief What What Three

introduction to Rochester PR Group

Understanding

the UK business mentality

can PR achieve? do other new to London clients do?

things to recommend

Brief introduction
Rochester Two

PR Group founded 2011

specialisms working with companies new to the UK and companies new to PR

Brief introduction
Rochester Two

PR Group founded 2011

specialisms working with companies new to the UK and companies new to PR

wide spread of client sectors of PR b2b, b2c, corporate, crisis

Very Type We PR

are members of the

is about promoting change the attitudes and behaviours of individuals, businesses and industries

2012 clients

Our services
Media relations Stakeholder engagement
Communications

strategy

Social media management

Search engine optimisation

Media monitoring

News generation

Event management & experiential events

Celebrity engagement

Copywriting

Crisis & issues management

Reputation management

Messaging

Marketing communications

Sponsorship management

Media training

Campaign coverage

Campaign coverage

Coverage evaluation

Linking media coverage to results: web traffic spikes and ecommerce 1 June 2012
Angels and Urchins (June issue) & Foody Traveller 7 March 2012 The Metro & Peaches, Trees and Bumblebees 3 April 2012 Food and Travel (April issue) 19 June 2012 Mungbeans & Champagne/ Scout London

16 May 2012 The I

18 March 2012 Fabulous Magazine

13 April 2012 Woman & Home (April issue)

14 May 2012 City AM, City AM Online & The Metro (London and Regionals)

9 June 2012 Mens Health & Your Home (June issues) & French Radio London

3 June 2012 Mungbeans and Champagne

Client quotes

Rochester PR is great to work with, they add value and deliver superb media results. I know that our goals are aligned and they are just as focused on our success as we are.

Tom McNeile, Managing Director

Campaign coverage

Campaign marketing
Advertisements

Direct email campaign

Annual reports, research reports and advertorials

Campaign coverage

Understanding the UK business mentality

Brands

(consumer, corporate or even personal):

We buy brands we know We buy brands we trust

The PR journey
Trusted
Preferred
Known for things that are different

Known for things I care about

Known for something Known Not known

What can PR achieve?

First Build Prove Prove

impressions count

Overcome

lack of knowledge

greater understanding you understand the UK market

you are investing in your brand

Return on investment

Is marketing activity giving the best return on investment for startup SMEs?
(Source: FT Creative Business)

What can PR achieve?

Provide Launch Launch Raise Reach

you with useful market and competitor information companies, representative offices products

a companys profile consumers traffic to a website and drive online

Increase

sales

Get

distributors/retailers to stock your product

What can PR achieve?

Trade launch piece generated major new listing and two enquiries from prospective clients

What do other new to London clients do?

Some At

do nothing!

Projects,

events and launches

least two clients in the last year,

did nothing when they arrived, hit issues three - four years later and no coverage to assist them

Under

estimate time needed to establish a presence

Media relationships
Strong Bonding A top 5 contact

Pedigree

Do they deliver?

Advantage

How are they different from others?

Relevance

Do they operate in my field? Do I know them?

Weak

Awareness

What do other new to London clients do?

Websites

that are badly translated, badly populated the same of understanding of the UK market for their business

Brochures Lack

Structure Key competitors Dynamics

Low

investment = low risk

our head down we dont need PR yet

Keep

Joanna started working with Nandos in 1999 when we had only 15 restaurants! Now we approach reputation management in a more grown up way, but wanting to remain down to earth and personable brand. Joanna has worked with us on various issues with calm professionalism, clear strategic advice and vitally a sense of humour just when its needed. An excellent choice for safeguarding your corporate reputation.

Keri Perkins, Head of PR

With China as the Market Focus for the 2012 London BookFair, we, in association with GAPP, organised over 300 events to highlight our involvement. It was challenging to run such a large scale campaign within a limited timeframe. We were delighted to work with Rochester PR Group - the team was quick to grasp what we needed; their attention to detail was impressive; they represented our views to a number of UK partners and gave us good advice which helped us achieve a very successful end result.

Yongchun Liu, Director

"We selected Rochester PR to manage our reception because we were confident they would overcome the various challenges we faced: a short timeframe, achieving a balance between our objectives and those of Rio 2016, and ultimately delivering our guests with an evening of serious fun. Their ability to inject creativity and combine Chinese, Brazilian and Western influences whilst keeping cool heads made Rochester PR a great asset and extension of our team."

Roger Yin, Chief Executive

Three things to recommend

Stakeholder Messaging Media

mapping

engagement

Stakeholder mapping
Media: national, regional, consumer, trade, corporate, offline, online, broadcast, social media
Government and Regulatory Bodies: e.g. The Food Standards Agency

Retailers: multiples, independents, wholesalers

Trade associations: e.g. Canned Food Importers Association, Food and Drink Federation, UK Association of Frozen Food Producers

Retail food brand

Consumers: existing and potential

Local communities

Opinion leaders: chefs, food writers, critics and columnists

Employees: current and potential

Messaging
Umbrella message

Key message

Key message

Key message

Proof points

Proof points

Proof points

Media planning
Earned media

Paid media

Owned media

Summary
PR/marketing Integral

hugely valued in the UK

part of business life

And finally
If I were down to my last dollar,

I would spend it on PR

SEMINAR BEST PRACTICES FOR SPANISH COMPANIES DOING BUSINESS IN / WITH THE UK IV EDITION
In collaboration with

BBVA LONDON

London November 2012

Sergio Espinosa

WHY BBVA LONDON?

Personal and Business Banking
Personalised Service Direct Access to Relationship Managers Bilingual Staff

Business Account Services

Current accounts in Sterling and other currencies (EUR, USD) Fixed Term deposit accounts in GBP/EUR/USD

Working capital credit facilities

Medium and long term investments credit facilities Foreign exchange services Online Banking UK and International Money Transfer services

Business Account Opening Requirements

Company constitution documents
Corporate ownership structure Information about shareholders, directors and account signatories. Proof ID Proof of Residence Bank References Expected account activity Business Turnover Payments volumes Geographical activities KYC Know Your Customer

BBVA Business banking contact details

business@bbvauk.com

We are open for Business

Adelante

SEMINAR BEST PRACTICES FOR SPANISH COMPANIES DOING BUSINESS IN / WITH THE UK IV EDITION
In collaboration with

CASE STUDIES PANEL