Thinking about expanding into the UK market? Positioning your website in the UK is an excellent direction, but SEO is one of several areas you should take care of.
Differences in consumer behavior and expectations affect both the preparation of marketing strategy and business decisions, such as the choice of a carrier that will deliver an order quickly.
With this in mind, we have prepared 10 issues you should know about before starting your business in the UK.
1. VAT number registration can take up to several weeks
It's a good idea to apply for a VAT number early, before you plan to start your business. It can take up to several weeks for the UK tax authority (HM Revenue and Customs) to assign the number.
VAT in the UK must be paid by any company that:
- has achieved a turnover of more than £90,000 in 12 months,
- expects to exceed that amount in the next 30 days.
Regardless of the size of your turnover, you need to register for VAT if:
- one lives outside the UK,
- The company's headquarters is located in a country other than the UK,
- deliver goods or services to the UK.
(2) The manufacture or import of plastic packaging components shall be taxed
Plastic Packaging Tax must be paid by companies that have imported or manufactured 10 or more tons of finished plastic items in the UK in the past 12 months. The same is true if a company expects to import or manufacture that amount in the next 30 days.
The obligation to pay this tax is when packaging or packaging components contain less than 30% recycled plastic. The current tax rate is 217.85 British pounds per ton.
3. the British use the imperial system
UK residents use the British imperial system, even though the UK also uses the metric system.
Bulk or packaged goods must be sold in metric units (grams, kilograms, etc.) - throughout the UK, except in Ireland, where different regulations apply. There are exceptions to these regulations, such as milk sold in pint-size returnable containers (1 pint is 0.568 liters).
Imperial units, can be displayed next to metric units, but in a way that does not make them more prominent.
4. the customer must be informed of the right to return the order
The customer has the right to return the order within 14 days of purchase, but must receive such information from the seller.
Why is this important? Without this information, a customer can return an order at any time for 12 months after purchase. If the store informs the customer of this possibility within these 12 months, the customer has 14 days to cancel the order.
5. tax breaks are available in the UK
Companies that engage in research and development projects can claim a corporate income tax credit. The project must meet the definition of R&D in science and technology.
Meanwhile, investors through the Enterprise Investment Scheme can enjoy tax benefits.
6. some product categories have special labeling rules
Labels in the UK must not be misleading about information such as price, quantity, size or how, where and when something was made, for example.
Special labeling rules apply to the manufacture, sale and distribution of footwear, food and beverages, children's products and precious metals.
An example of footwear labeling guidelines is information on the label in English or on an easy-to-read pictogram about what material makes up 80% of the upper surface, the lining of the upper and insole, and the outsole.
Correct labeling is not only a legal obligation, but also a matter of trust for the customer, who bases his decision on the information on the label.
7. companies that process personal data must pay a data protection fee
The data protection fee for the Information Commissioner's Office (ICO) applies:
- companies,
- organizations,
- sole proprietorships.
The amount of the fee depends on the size of the company and turnover. Some companies may be exempt from it.
For example, a company that has between 11 and 250 employees and has never paid this data protection fee before will pay £40. The data of such a company or organization is placed on the public data protection register.
On the one hand, data protection and privacy is a legal requirement, on the other hand, it is an expression of the approach to privacy and security of customer data.
The UK is severely punishing companies that break regulations. The Information Commissioner's Office has fined two companies £340,000 for unwanted calls. Another was reprimanded for using facial recognition technology without permission to process biometric data.
8. in the UK, RODO UK is in effect
EU data protection regulations known as EU RODO (General Data Protection Regulation, GDPR) have been incorporated into UK law, but with some changes. They are effective as UK GDPR (RODO UK) along with the amended Data Protection Act 2018. (Data Protection Act 2018).
The basic principles and obligations are the same. However, those that apply to the transfer of personal data between the UK and the European Economic Area (EEA) have changed.
According to the European Commission's decision, the UK provides an "adequate level of protection for personal data." This means that additional permissions and safeguards are not needed to transfer data out of the EEA. Such measures are necessary if a third country (which, after Brexit, is the UK) does not provide the level of protection required by the EC.
9. British consumers buy with smartphones
The site you want to sell on must be optimized for mobile devices so that customers can shop quickly and conveniently.
In the last quarter of 2023, these devices:
- generated 78% of retail store traffic,
- accounted for 71% of online sales.
In 2023, mobile devices accounted for nearly half (47.8%) of all Internet traffic.
10. opinions and reviews influence purchasing decisions
UK consumers' purchasing decisions are driven by the opinions and reviews available online. This is confirmed by the latest Statista data, from June 2024:
- Half of the respondents declare that online customer reviews are very helpful.
- Even more, 54% of respondents, admit that they always shop around online before making a major purchase.
These numbers clearly show how important it is for consumers to rely on the experiences of others. How do you use this information with in your sales strategy?
The credibility of the product will be enhanced by integrating a plugin on the site that displays the latest customer ratings from Google, or placing a section directly on the product pages with customer reviews.
Summary
Depending on your business profile and the products you sell, you will be subject to different regulations. However, we hope that our overview will help you pay attention to the important aspects of operating in the UK related to doing business overseas and building relationships with customers.
In conclusion, before you start operating in the UK market, consider the issues:
- Taxes, including VAT number registration and data protection fees.
- Consumer Rights.
- Adapting the website to suit shopping habits.
- Take advantage of concessions and subsidies for business development.
- Product labeling rules and markings related to the measurement system.
Information Sources [Accessed 03/09/2024].
- www.gov.uk/register-for-vat
- community.hmrc.gov.uk/customerforums/vat/463ab1dd-a9f8-ee11-a81c-002248c6a76a
- www.contractoradviceuk.net/uk-vat-registration-guide-contractors/
- www.gov.uk/guidance/check-if-you-need-to-register-for-plastic-packaging-tax
- www.gov.uk/weights-measures-and-packaging-the-law.gov.uk/weights-measures-and-packaging-the-law/packaged-goods
- www.gov.uk/online-and-distance-selling-for-businesses
- www.great.gov.uk/international/content/investment/how-we-can-help/uk-tax-and-incentives/
- www.gov.uk/product-labelling-the-law
- www.co.org.uk/for-organisations/data-protection-fee/data-protection-fee-self-assessment/y/Cost/N/Bet/Less/N/N/Reg
- www.gov.uk/data-protection-register-notify-ico-personal-data
- ico.org.uk/for-organizations/data-protection-and-the-eu/overview-data-protection-and-the-eu/
- ico.org.uk/for-organizations/data-protection-and-the-eu/data-protection-and-the-eu-in-detail/the-uk-gdpr/
- uodo.gov.pl/pl/535/2509
- www.statista.com/statistics/1254788/retail-site-device-visit-order-share-uk/
- datareportal.com/reports/digital-2023-united-kingdom
