What are the Legal Requirements for Setting up an Office in the UK?
Opening an office in the UK is a low-cost procedure and there are no minimum capital requirements. However, as a business owner you'll need to comply with certain regulations and requirements to ensure this crucial step goes smoothly and you set your business for success.
When choosing an office, you should bear in mind that UK law defines the minimum space per employee this type of workspace should have. This is currently set at 5 square meters or 11 cubic feet.
There's also an insurance requirement, since staffed offices must be covered by employers' liability insurance. Other types of insurance are not a legal requirement, but depending on the nature of your business you may want to take them up to ensure you're covered down the line. Some common types of office insurance are listed here.
You'll also need to comply with occupational health guidelines. This includes fire safety, first aid, equipment inspection and testing, ventilation, temperature, and risk assessments. There are multiple factors that come into place when ensuring that the work environment is safe and conducive to productivity, so you'll want to become familiar with at least two sets of guidelines:
- British Standards BS3044, which refers to the selection of office furniture and workstation equipment.
- The Workplace Health Safety And Welfare Regulations 1992. You can access them online here
As the owner of an office-based business, you need to be familiar with employment law in aspects such as: recruitment practices, contracts, working hours, fair dismissal, rest periods and breaks, paid holidays, statutory paid and unpaid leave, minimum wage, flexible work arrangements, equal opportunities, and anti-discrimination policy. In the UK, HR issues are governed by the Employment Rights Act 1996, the Trade Union and Labour Relations Act 1992, and the Equality Act 2010.
If you operate over a certain threshold (which is defined here), you'll need to process wages through the PAYE system. For a complete overview of the legal elements involved in hiring staff, click here.
- Registration: You'll need to choose a company structure to formalise the legal status of your business. Sole traders, partnerships, or limited companies are the most common among SMEs. Each comes with different advantages, liabilities, reporting requirements, and obligations, which are explained in detail here.
Taxes and financial reporting:
Whether you decide to file your own returns or have an accountant do it on your behalf, you should have an idea of the applicable taxes so you can work them into your profitability assessment. UK business taxes include corporation tax, business rates, and VAT depending on your annual turnover. You'll also need to register with HM Revenue and Customs and comply with tax filing deadlines.
Depending on your company structure, you may be asked to file annual accounts with Companies House. More information is available here.
Office-based businesses don't need a license to operate, except if they are in sectors like catering, import/export, gambling, child care, or financial services. Here's a full list of all the businesses that require a licence.
Rules apply to how data on employees, customers and suppliers is collected, handled, and stored. Ensure all marketing campaigns and communications abide by the regulations to avoid being fined. The main pieces of legislation covering this are the Privacy and Electronic Communications Act and GDPR (4, 5).
The application of these rules can be quite complex, so here's a self-assessment tool you can use to determine what applies to your office.
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