Explore the relevant accounting and tax implications
Today’s world is a one big economy and it is very easy to set up new business structures across different territories. Overseas companies that are registered in UK have certain compliances to meet per UK legislation for Companies House and HMRC.
An overseas company is defined under company law as a company incorporated outside the UK (Great Britain and Northern Ireland). If it ‘opens a UK establishment’ it must register with the Registrar of Companies under the Overseas Companies Regulations 2009, SI2009/1801. The concept of UK establishment is based on former ‘place of business’ and now includes a branch as defined under the EU 11th Company Law Directive.
Companies House has produced extensive guidance to highlight the obligations for overseas companies and has provided detailed guidance on:
The UK is no longer part of the EEA. This means companies with a registered UK establishment, and whose ‘home’ country is inside the EEA, must now report the same information as overseas companies.
An overseas company that must prepare, audit and disclose accounting documents under parent law must deliver them to Companies House within three months from the date the documents are required to be disclosed in accordance with its parent law.
Accounting documents include the accounts of the company, annual report, auditor’s report and director’s report.
You must file the accounts with a form OS AA01 containing:
Where companies are not required to prepare and disclose accounting documents under parent law, these companies must still prepare the audited accounts and file these with directors’ and auditor’s report as it would if it was formed and registered under the UK Companies Act. The period covered for these accounts would be as set up based on their accounting reference date allocated by Companies House.
You can find detailed requirements for accounts, which include:
Under FA98/SCH18/PARA3 (1)(b) HMRC may require a return and accounts relevant to the tax liability or to the application of the CT Acts to the company. For company accounts HMRC’s requirements are limited to the information required by the Registrar as stated above. More guidance can be found in HMRC manual CTM93240.
You may find ACCA’s Guide to managing overseas business relationships useful if a UK business is intending to set up business overseas.