We discussed the merits and drawbacks of a subsidiary vs a branch vs a standalone company and within a week of our fee proposal being accepted. We had formed a UK limited company, that was a wholly owned subsidiary of this Danish company. The use of Model Articles of Association was considered sufficient so there was little need for a bespoke set of Articles nor a shareholders’ agreement, being a wholly owned subsidiary, which meant the incorporation process could be done quickly.
The next step was for the new company to set up a UK company bank account, a notoriously difficult task with the main UK high street banks, especially when there are no UK-resident directors of a new UK company. We recommended a temporary solution could be to open an online account with an established Money Services Provider, which admittedly would not provide all the services and frills of a high street bank but would provide the equivalent of a “bank” account with a UK sort code, “bank” account number, IBAN and Swift Code enabling the company to receive monies from customers, make payments to suppliers, staff and to HMRC and to undertake transactions in foreign currencies. The medium-term view being that once the company had achieved a financial footprint in the UK, perhaps after having filed a couple years’ of accounts at Companies House, they could then revisit opening a bank account with one of the main UK banks, who would then be more likely to entertain them.
We were engaged to do the bookkeeping for the UK subsidiary, which is done in-house by the Beevers and Struthers Bookkeeping Team, ensuring that the UK general ledger is consistent with the parent company’s general ledger in Denmark facilitating comparison, easing consolidation and assisting intercompany reconciliations and cut-off processes at month-end and year-end.
We discussed voluntary VAT registration early-on in the engagement as the client was involved in B2B transactions. It was sensible, for a number of reasons, to register for VAT even though the VAT threshold had not been exceeded, and we carried this out for our client. We prepare and file their quarterly VAT returns.
To assist our client to keep a close eye on the performance of the UK subsidiary, we prepare monthly management accounts in a format specifically tailored for their group monthly reporting. The bookkeeping and management accounts preparation are carried out within the Xero cloud bookkeeping platform and the data can be accessed from any web-enabled device from anywhere in the world.
Once they were ready to take on their first UK employee, we registered a Pay-As-You-Earn (PAYE) scheme with HMRC, organised the compulsory pension auto enrolment scheme and provided a monthly payroll bureau service. It was vital that the UK subsidiary had a UK sort code and account number at this stage, as it is a requirement when setting up a payroll with pension auto enrolment.
