Economy Profile of United Kingdom

Ease of Doing Business in United Kingdom

ease of doing business in united kingdom

Rankings on Doing Business topics – United Kingdom

rankings on doing business topics united kingdom

Topic Scores

topic scores united kingdom

Starting a Business

This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city.

To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally start and formally operate a company (number)

  • Preregistration (for example, name verification or reservation, notarization)

  • Registration in the economy’s largest business city

  • Postregistration (for example, social security registration, company seal)

  • Obtaining approval from spouse to start a business or to leave the home to register the company

  • Obtaining any gender specific document for company registration and operation or national identification card

Time required to complete each procedure (calendar days)

  • Does not include time spent gathering information

  • Each procedure starts on a separate day (2 procedures cannot start on the same day)

  • Procedures fully completed online are recorded as ½ day

  • Procedure is considered completed once final document is received

  • No prior contact with officials

Cost required to complete each procedure (% of income per capita)

  • Official costs only, no bribes

  • No professional fees unless services required by law or commonly used in practice

Paid-in minimum capital (% of income per capita)

  • Funds deposited in a bank or with third party before registration or up to 3 months after incorporation

To make the data comparable across economies, several assumptions about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes.

The business:

-Is a limited liability company (or its legal equivalent). If there is more than one type of limited liability company in the economy, the limited liability form most common among domestic firms is chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office.

-Operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

-Performs general industrial or commercial activities such as the production or sale to the public of goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily polluting production processes.

-Does not qualify for investment incentives or any special benefits.

-Is 100% domestically owned.

-Has five business owners, none of whom is a legal entity. One business owner holds 30% of the company shares, two owners have 20% of shares each, and two owners have 15% of shares each.

-Is managed by one local director.

-Has between 10 and 50 employees one month after the commencement of operations, all of them domestic nationals.

-Has start-up capital of 10 times income per capita.

-Has an estimated turnover of at least 100 times income per capita.

-Leases the commercial plant or offices and is not a proprietor of real estate.

-Has an annual lease for the office space equivalent to one income per capita.

-Is in an office space of approximately 929 square meters (10,000 square feet).

-Has a company deed that is 10 pages long.

The owners:

-Have reached the legal age of majority and are capable of making decisions as an adult. If there is no legal age of majority, they are assumed to be 30 years old.

-Are in good health and have no criminal record.

-Are married, the marriage is monogamous and registered with the authorities.

-Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population.

Starting a Business – United Kingdom

starting a business united kingdom

Figure – Starting a Business in United Kingdom – Score

figure starting a business in united kingdom score

Figure – Starting a Business in United Kingdom and comparator economies – Ranking and Score

DB 2020 Starting a Business Score

figure starting a business in united kingdom and comparator economies ranking and score

Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

Figure – Starting a Business in United Kingdom – Procedure, Time and Cost

figure starting a business in united kingdom procedure time and cost

Details – Starting a Business in United Kingdom – Procedure, Time and Cost

1 Complete application form IN01 and file for registration with Companies House

Agency : Companies House

Company founders have the option to check for unique company name and file for registration themselves, or to retain incorporation professionals to do so. The option to complete registration is through paper application or electronically.

Less than one day

(online procedure)

GBP 12 for online

registration

In case the company chooses to file for incorporation itself online, model articles of incorporation and company memorandum are generated automatically by the registration website www.gov.uk/register-a-company-online. In addition the above forms, all companies must provide the following information to the relevant Registrar of Companies (i.e., for England and Wales, Scotland, or Northern Ireland):

  • Statement of compliance with all requirements of the 2006 Companies Act;

  • Application form IN01, which includes:

o proposed company name;

o country of registration office (e.g. England and Wales (or Wales), Scotland or Northern Ireland);

  • Whether the liability of the members is to be limited and if so whether by shares or guarantee; and;

  • Whether the company is public or private;

  • In the case of a company with a share capital, the application must also include a statement of the capital and initial shareholdings, including the name and address of the subscriber.

  • A statement of the proposed officers, being the first director and company secretary (unless in the case of a private company, where the appointment of a company secretary is optional);

  • A statement of the intended registered office address.

On completing the online form if the company name provided cannot be used the website will alert you to this and you have the option of selecting another name. Fees for filing incorporation documents are as follows: GBP 12 for a Web filed incorporation and GBP 40 for paper filers (or GBP 100 for a same day service). The standard digital registration fee through a third party agent is GBP 10 (or GBP 30 for a same day service). There is no requirement for a company to use a third party agent. Third party agents may charge additional fees as well as the standard registration fee.

In case the company chooses to retain incorporation agents to file for registration, in addition to the above documents, the application file must include the agents’ name and address. Note that in case the company wants to amend model articles of association or company memorandum it cannot file for registration online via www.gov.uk/register-a-company-online. Instead, the company must use professionals to compose incorporation documents and submit them via specialized software to Companies House.

From 30 June 2016, new companies have to provide their People with Significant Control information as part of the incorporation process. The data on beneficial ownership will be accessible and searchable from the database of Companies House.

No.

Procedures

Time to Complete

Associated Costs

2 Register for PAYE

Agency : HMRC

The company must contact the HMRC to set up a contribution scheme for national insurance and pay-as-you-earn (PAYE) tax, which deducts tax from employee wages or salary. The company will be issued with an activation PIN within 5 business days – typically less – and will have to activate this PIN within 28 days (or else request a new PIN). The company will use the PIN to register and enroll online. For security reasons, a check is run on the data provided. A small percentage of registrations who fail the security check can take longer. Otherwise, activation is instant.

3 Register for VAT

Agency : HMRC

A business will need to register for VAT if its taxable goods and services supplied within the UK for the previous 12 months is more than the current registration threshold of GBP 85,000 or the business expects it to go over that figure in the next 30 days alone, it must register for VAT. However, the business may also voluntarily choose to register for VAT if its VAT taxable goods fall under the GBP 85,000 threshold.

2 days

no charge

Most businesses, including Limited Companies, can register for VAT account online at: https://online.hmrc.gov.uk/registration or send paper forms through the post. Most applications for VAT registration can be completed online but there are some circumstances where a business has to apply by post. To register online for VAT or use other VAT online services, a business will first

need to sign up for HMRC Online Services or the Government Gateway.

Since 6 April 2013, companies have to report their PAYE in real time. This means that companies must either report online or require their accountants to submit reports every time they pay their employees.

4 Sign up for employer’s liability insurance

Agency : Insurance company

The Employers’ Liability (Compulsory Insurance) Act of 1969 requires all employers in the United Kingdom to maintain employers’ liability insurance from an approved insurance company. The minimum legal requirement for employers’ liability insurance is a limit of indemnity of GBP 5,000,000. In addition, a fine of GBP 2,500 per day can be imposed if employer's liability insurance is not taken out.

1 day

no charge

The Employers’ Liability (Compulsory Insurance) Act of 1969 requires that proof of insurance be posted at the workplace. Since October 1, 2008, it is possible to display this information electronically, although a company that wishes to do this will need to ensure that its employees

know how and where to find the certificate and have reasonable access to it.

Dealing with Construction Permits

This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information

What the indicators measure

Procedures to legally build a warehouse (number)

  • Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates

  • Submitting all required notifications and receiving all necessary inspections

  • Obtaining utility connections for water and sewerage

  • Registering and selling the warehouse after its completion

    Time required to complete each procedure (calendar days)

  • Does not include time spent gathering information

  • Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule

  • Procedure is considered completed once final document is received

  • No prior contact with officials

    Cost required to complete each procedure (% of income per capita)

  • Official costs only, no bribes

    Building quality control index (0-15)

  • Quality of building regulations (0-2)

  • Quality control before construction (0-1)

  • Quality control during construction (0-3)

  • Quality control after construction (0-3)

  • Liability and insurance regimes (0-2)

  • Professional certifications (0-4)

To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used.

The construction company (BuildCo):

  • Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or topographical experts.

  • Owns the land on which the warehouse will be built and will sell the warehouse upon its completion.

    The warehouse:

  • Will be used for general storage activities, such as storage of books or stationery.

  • Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita.

  • Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures.

  • Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements).

    The water and sewerage connections:

  • Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built.

  • Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 gallons) a day.

  • Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.

Dealing with Construction Permits – United Kingdom

dealing with construction permits united kingdom

Figure – Dealing with Construction Permits in United Kingdom – Score

figure dealing with construction permits in united kingdom score

Figure – Dealing with Construction Permits in United Kingdom and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

figure dealing with construction permits in united kingdom and comparator economies ranking and score

Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators.

Figure – Dealing with Construction Permits in United Kingdom – Procedure, Time and Cost

figure dealing with construction permits in united kingdom procedure time and cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Figure – Dealing with Construction Permits in United Kingdom and comparator economies – Measure of Quality

figure dealing with construction permits in united kingdom and comparator economies measure of quality

Details – Dealing with Construction Permits in United Kingdom – Procedure, Time and Cost

1 Obtain planning permission

Agency : Planning Department of Local Authority

BuildCo must obtain planning permission from the local planning authority. In London, the decision-maker is the relevant London borough where the site is located. There are 33 boroughs in Greater London.

The planning application must be accompanied by a plan of the site, drawings showing the proposed development, and any other information the local authority considers necessary. The local authority publishes a list with the information it considers necessary on its website, so that applicants know what is required of them. The relevant legislative framework is the Town and Country Planning (Development Management Procedure) (England) Order 2015. If BuildCo is submitting a paper application, it must also provide at least 3 copies of the accompanying documents. Alternatively, BuildCo can apply online via the Planning Portal, which accepts electronic planning applications on behalf of all London boroughs, using a standard application form that was introduced across England in 2008. If it applies electronically, no further copies are required. A fee is charged for the planning application, based on the amount of floor space that would be created by the scheme.

The size of BuildCo's proposed development falls below the threshold for a “major application”, which means that the time frame for a decision is 8 weeks rather than 13. During this period, the local planning authority will publicize the application in the surrounding area and consult a number of statutory consultees — bodies with a specialist responsibility such as nature conservation, heritage protection, highways — who may wish to comment on the acceptability of the proposal from their perspective. The local authority accepts these comments and the comments of any local people who wish to comment on the application. They will be taken into account in the decision to grant or refuse permission. If no decision is made within 8 weeks, or if the authority decides to refuse permission, the applicant is entitled to appeal to the Secretary of State.

Additionally, in April 2015 the Government made permanent a previously time limited change to 'permitted development' rights allowing businesses to extend (with certain limits) industrial and warehouse buildings without having to obtain express planning permission (Town and Country Planning (General Permitted Development) (England) Order 2015).

56 days GBP 8,012

2 Hire an Approved Inspector

Agency : Approved Inspector

BuildCo signs a contract with an Approved Inspector. Approved Inspectors (AI) are companies or individuals authorized under the Building Act 1984 to carry out building control work in England and Wales.

1 day

GBP 2,964

An Approved Inspector will:

  • Advise BuildCo on how the building regulations apply to its work (to a degree)

  • Check plans for compliance with building regulations

  • Issue a planning certificate (if requested)

  • Inspect the work as it progresses

Issue a final completion certificate (if requested)

The building control process was extended under the Building Act 1984 to include AIs as well as Local Authorities. Currently, there are 91 AIs on CICAIR Limited's register covering England and Wales, accounting for about 60% of all building control work. AIs are licensed by CICAIR Limited for every 5 years. A list of AIs is available from the Construction Industry Council website.

Local Authorities have statutory time limits of 6 to 8 weeks for approving plans while AIs do not have any time limits so may provide a faster turnaround. By hiring AIs it eliminates need for companies to deal with the Building Control Department at the Local Authority. However, the Local Authority is still responsible for the enforcement of the regulations. AIs usually operate nationally and bring consistency of interpretation of the Building Regulations.

While the planning permission (consent) is being obtained from Planning Department in Local Authority, the AI sends an Initial Notice to the Building Control Departement of Local Authority to inform them that it will take responsbilty over the building control process. The Local Authority Building Control Departement has 5 days in which to reject the notice.

If the Initial Notice is not rejected within 5 days construction work may begin. AI, for BuildCo's case, would conduct approximately 8-9 inspections at various stages of construction on a risk assessment basis.

AIs are in competition with local authority building control and have no restrictions on how much they can charge. AI fees are usually lower than local authority building control who are covered by the Building (Local Authority Charges) Regulations 2010 which requires local authorities to fix their charges by means of a scheme, full cost recovery and the fact that the user should pay for the actual service they receive. The cost for the services of AI is comprised of several elements and is mostly charged on a hourly rate. The below estimate is a sample of what an average cost breakdown by an AI looks like:

  • Plan checking: (16 hours x GDP 60) = GBP 960.00

  • Inspections: (9 sessions x 2h x GBP 60.00) = GBP 1,080.00

  • Structural checking: (2 hrs x GBP 60.00) = GBP 120.00

  • Consultations: (0.5 hrs x GBP 60) = GBP 30.00

  • Electronic/Internet drawings GBP 75.00

  • Meetings: (3.75 hrs x GBP 60.00) = GBP 225.00

  • Administrative: (0.5 hrs x GBP 60.00) = GBP 30.00

  • Inspections petrol fee: (40 miles x GBP 3.60) = GBP 144.00

  • Contingency: (5 hrs x GBP 60.00) = GBP 300.00

Total: GBP 2,964

3 Approved Inspector files the initial notice to the Local Authority

Agency : Local Authority

Once the contract is signed and the terms of reference are outlined, the builder and the AI jointly notify the local authority of their intention to build — also called an initial notice. This initial notice will inform the Local Council that the AI has been retained. Once this notice has been accepted by the local authority, the responsibility for plan checking and site inspection will be formally placed on the AI.

The local council has 5 days to accept or reject the initial notice in writing (via email, fax or post). Acceptance is given by default if the local authority does not respond within the 5-day period.

During that period of time, no work can be done.

4 Apply for water and sewage connection

Agency : Thames Water Utilities Ltd.

A Water Fittings Table outlining the fittings due to be installed and a site location plan showing the point of entry to the property boundary for new supplies must be submitted with the form. In the application for a sewage connection, applicants need to provide plans detailing what connection is being made, and the type of sewer they are connecting to. Applicants may submit an application form (either online or by post) to the Thames Water Utilities Ltd.

1 day

GBP 485

There is a £485 charge to connect to a public sewer by lateral drain.

Once construction work commences, the AI would conduct at least 8 — 9 inspections at various stages of construction and risk-based factors (for BuildCo’s case).

5 days no charge

Details – Dealing with Construction Permits in United Kingdom – Measure of Quality

details dealing with construction permits in united kingdom measure of quality details dealing with construction permits in united kingdom measure of quality

Getting Electricity

This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to obtain an electricity connection (number)

  • Submitting all relevant documents and obtaining all necessary clearances and permits

  • Completing all required notifications and receiving all necessary inspections

  • Obtaining external installation works and possibly purchasing material for these works

  • Concluding any necessary supply contract and obtaining final supply

Time required to complete each procedure (calendar days)

  • Is at least 1 calendar day

  • Each procedure starts on a separate day

  • Does not include time spent gathering information

  • Reflects the time spent in practice, with little follow-up and no prior contact with officials

    Cost required to complete each procedure (% of income per capita)

  • Official costs only, no bribes

  • Value added tax excluded

    The reliability of supply and transparency of tariffs index (0-8)

  • Duration and frequency of power outages (0–3)

  • Tools to monitor power outages (0–1)

  • Tools to restore power supply (0–1)

  • Regulatory monitoring of utilities’ performance (0–1)

  • Financial deterrents limiting outages (0–1)

  • Transparency and accessibility of tariffs (0–1)

    To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used.

    The warehouse:

    • Is owned by a local entrepreneur and is used for storage of goods.

    • Is located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

    • Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway.

    • Is a new construction and is being connected to electricity for the first time.

    • Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square feet). The plot of land on which it is built is 929 square meters (10,000 square feet).

      The electricity connection:

    • Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).

    • Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road.

    • Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service panel or switchboard and the meter base.

      The monthly consumption:

    • It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.

    • If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.

    • Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.

    Price of electricity (cents per kilowatt-hour)*

  • Price based on monthly bill for commercial warehouse in case study

*Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity.

Getting Electricity – United Kingdom

2. Mediation/Conciliation 0.5

2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects (for

example, definition, aim and scope of application, desig

No

2.a. Is voluntary mediation or conciliation available? Yes

2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or No conciliation is successful, a refund of court filing fees, income tax credits or the like)?

Resolving Insolvency

Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Time required to recover debt (years)

  • Measured in calendar years

  • Appeals and requests for extension are included

    Cost required to recover debt (% of debtor’s estate)

  • Measured as percentage of estate value

  • Court fees

  • Fees of insolvency administrators

  • Lawyers’ fees

  • Assessors’ and auctioneers’ fees

  • Other related fees

    To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used:

    • A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties.

    • The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater.

    • The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. The hotel cannot pay back the loan, but makes enough money to operate otherwise.

    In addition, Doing Business evaluates the quality of legal framework applicable to judicial liquidation and reorganization proceedings and the extent to which best insolvency practices have been implemented in each economy covered.

    Outcome

  • Whether business continues operating as a going concern or business assets are sold piecemeal

    Recovery rate for creditors

  • Measures the cents on the dollar recovered by secured creditors

  • Outcome for the business (survival or not) determines the maximum value that can be recovered

  • Official costs of the insolvency proceedings are deducted

  • Depreciation of furniture is taken into account

  • Present value of debt recovered

    Strength of insolvency framework index (0- 16)

  • Sum of the scores of four component indices:

  • Commencement of proceedings index (0-3)

  • Management of debtor’s assets index (0-6)

  • Reorganization proceedings index (0-3)

  • Creditor participation index (0-4)

Resolving Insolvency – United Kingdom

resolving insolvency united kingdom

Figure – Resolving Insolvency in United Kingdom – Score

figure resolving insolvency in united kingdom score

Figure – Resolving Insolvency in United Kingdom and comparator economies – Ranking and Score

DB 2020 Resolving Insolvency Score

figure resolving insolvency in united kingdom and comparator economies ranking and score

Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index.

Figure – Resolving Insolvency in United Kingdom – Time and Cost

figure resolving insolvency in united kingdom time and cost

Figure – Resolving Insolvency in United Kingdom and comparator economies – Measure of Quality

figure resolving insolvency in united kingdom and comparator economies measure of quality

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Figure – Resolving Insolvency in United Kingdom and comparator economies – Recovery Rate

figure resolving insolvency in united kingdom and comparator economies recovery rate

Details – Resolving Insolvency in United Kingdom

details resolving insolvency in united kingdom

Details – Resolving Insolvency in United Kingdom – Measure of Quality

details resolving insolvency in united kingdom measure of quality details resolving insolvency in united kingdom measure of quality

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Employing Workers

Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business.

The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Hiring

(i) whether fixed-term contracts are prohibited for permanent tasks; (ii) maximum cumulative duration of fixed-term contracts;

(iii) length of the maximum probationary period; (iv) minimum wage;(v) ratio of minimum wage to the average value added per worker.

Working hours

(i) maximum number of working days allowed per week; (ii) premiums for work: at night, on a weekly rest day and overtime;

(iii) whether there are restrictions on work at night, work on a weekly rest day and for overtime work; (iv) length of paid annual leave.

Redundancy rules

(i) whether redundancy can be basis for terminating workers; (ii) whether employer needs to notify and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment.

To make the data comparable across economies, several assumptions about the worker and the business are used.

The worker:

  • Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.

  • Is a full-time employee.

  • Is not a member of the labor union, unless membership is mandatory.

    The business:

  • Is a limited liability company (or the equivalent in the economy).

  • Operates a supermarket or grocery store in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Has 60 employees.

  • Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them.

  • Abides by every law and regulation but does not grant workers more benefits than those mandated by law, regulation or (if applicable) collective bargaining agreements.

Redundancy cost

(i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected.

Employing Workers – United Kingdom

Details – Employing Workers in United Kingdom

Answer

Hiring

Fixed-term contracts prohibited for permanent tasks? No

Maximum length of a single fixed-term contract (months) No limit

Maximum length of fixed-term contracts, including renewals (months) No limit

Minimum wage applicable to the worker assumed in the case study (US$/month) 1400.8

Maximum length of probationary period (months) 6.0

Ratio of minimum wage to value added per worker 0.3

Working hours

Standard workday 8.0

Maximum number of working days per week 6.0

Premium for night work (% of hourly pay) 0.0

Premium for work on weekly rest day (% of hourly pay) 0.0

Premium for overtime work (% of hourly pay) 0.0

Restrictions on night work? No

Restrictions on weekly holiday? No

Restrictions on overtime work? No

Paid annual leave for a worker with 1 year of tenure (working days) 28.0

Paid annual leave for a worker with 5 years of tenure (working days) 28.0

Paid annual leave for a worker with 10 years of tenure (working days) 28.0

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 28.0

Redundancy rules

Dismissal due to redundancy allowed by law? Yes

Third-party notification if one worker is dismissed? No

Third-party approval if one worker is dismissed? No

Third-party notification if nine workers are dismissed? No

Third-party approval if nine workers are dismissed? No

Retraining or reassignment obligation before redundancy? No

Priority rules for redundancies? No

Priority rules for reemployment? No

Redundancy cost

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 1.0

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 5.0

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 10.0

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 0.0

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 5.3

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 3.5

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 8.5

Unemployment protection after one year of employment? Yes

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 4.0

PEO United Kingdom

The United Kingdom stands as a prominent destination for professional employer organization (PEO) services, offering a dynamic and sophisticated business environment. With its rich history, global financial hub status, and diverse talent pool, the UK presents an attractive proposition for companies seeking to expand their operations. As a PEO country, the UK boasts a well-developed infrastructure, a stable legal framework, and a comprehensive social security system, all of which facilitate seamless employment and administrative processes. The UK’s PEO services enable businesses to navigate complex employment regulations, manage payroll and benefits, and efficiently handle HR tasks, allowing them to focus on their core competencies while confidently expanding their footprint within this influential market.

PEO services, or Professional Employer Organization services, play a vital role in the United Kingdom’s dynamic business landscape. These services offer a comprehensive and outsourced solution to various HR-related functions, enabling companies to focus on their core competencies while efficiently managing human resources. PEOs in the UK assist businesses in navigating complex employment regulations, payroll administration, employee benefits, tax compliance, and other workforce-related challenges. By serving as co-employers, PEOs help mitigate risks for companies and provide access to a broader range of HR expertise, ultimately contributing to enhanced operational efficiency, regulatory adherence, and the overall growth of businesses across the UK.

Business Reforms in United Kingdom

From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by

Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. =Doing Business reform making it easier to do business. = Change making it more difficult to do business.

DB2020

Paying Taxes: The United Kingdom made paying taxes more difficult by introducing a new pension scheme paid by the employer.

DB2019

Getting Electricity: The United Kingdom made getting electricity faster by implementing several initiatives to expedite the external connection works performed by sub-contractors.

DB2016

Paying Taxes: The United Kingdom made paying taxes less costly for companies by reducing the corporate income tax rate and increasing the wage amount per employee that is exempted from social security contributions paid by employers. On the other hand, the United Kingdom increased municipal tax rates and environment taxes.

Enforcing Contracts: The United Kingdom made enforcing contracts more costly by increasing the court fees for filing a claim.

DB2015

Starting a Business: The United Kingdom made starting a business easier by speeding up tax registration.

Paying Taxes: The United Kingdom made paying taxes less costly for companies by reducing the corporate income tax rate. On the other hand, it increased the landfill tax.

DB2014

Starting a Business: The United Kingdom made starting a business easier by providing model articles for use in preparing memorandums and articles of association.

Registering Property:

The United Kingdom made transferring property easier by introducing electronic lodgment for property transfer applications.

Employing Workers:

United Kingdom increased the cap on weekly wage provided to employees on the severance payment and the minimum wage.

DB2013

Paying Taxes:

The United Kingdom made paying taxes less costly for companies by reducing the corporate income tax rate.

Employing Workers:

The United Kingdom increased redundancy costs of the severance pay applicable in cases of redundancy dismissals.

DB2012

Dealing with Construction Permits:

The United Kingdom made dealing with construction permits easier by increasing efficiency in the issuance of planning permits.

Employing Workers:

United Kingdom increased the severance payment obligation applicable in cases of redundancy dismissals.

DB2011

Enforcing Contracts:

The United Kingdom improved the process for enforcing contracts by modernizing civil procedures in the commercial court.

Resolving Insolvency:

Amendments to the United Kingdom’s insolvency rules streamline bankruptcy procedures, favor the sale of the firm as a whole and improve the calculation of administrators’ fees.

DB2010

Dealing with Construction Permits:

The United Kingdom made dealing with construction permits easier and less time consuming through wider use of approved inspectors

Registering Property:

The United Kingdom speeded up property registration by introducing automatic electronic processing of the land transaction return.

Employing Workers:

The United Kingdom increased mandatory paid annual leave.

DB2009

Employing Workers:

The United Kingdom increased the mandatory paid annual leave.

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