As industry regulations tighten up across the globe, we take a look at some of the most essential things you need to consider while starting a food delivery business in the UK! According to a recent data source, it is estimated that more than 5 million business have been registered across the UK. Most of these businesses are SMEs, that account for over 60% of all private sector employment. These small businesses are really what keep the British economy moving and the UK government looks to support new business startups whenever possible!
What types of corporate entities are there in the United Kingdom?
The UK has three main legal forms of corporate entity. They are:
- Sole proprietorship (also known as sole trader)
- Limited companies
The most common form/structure is Sole proprietorship, This structure involves less hassles in terms of ownership and profit sharing. This legal structure tends to be used by ‘one man’ or micro businesses with very few employees. To open this type of business you must register with the UK tax authorities as self employed. You’re taxed together for both your personal tax liabilities as well as those incurred through your work.
You can also explore Partnerships where the liability and the profits are divided based on the number of partners that are involved in the business. If you want to open a limited company in the UK you must have a registered office in the country, although it’s not necessary that all of the directors live in Britain. Registering a limited company in the UK is more complex than setting up a sole trader arrangement, but the tax is then managed separately to your personal liabilities.
Before starting up, you might want to do a little bit on reading up on the various administration processes that are involved in setting up a business. Check out a report by the World Bank on “Doing Business“ in the UK.
The good news is that there’s no minimum capital requirement to start your business here. Aside from the cost of registering with Companies House, the other steps such as registering for tax are free. All processes can usually be completed online, and shouldn’t take more than a few days in most cases.
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Company Registration Process
The UK Government website offers a wealth of information about how to register different types of business. The process varies according to the type of business you wish to create. So in order to register you company, you need the following basic documents to initiate the registration process.
- Select a name, and set up a UK address for the company
- Register your business with Companies House
- Provide proof of identity for at least one director and at least one shareholder
- Set up your company for Corporation Tax
The documents you’ll be asked to provide include:
- Articles of association
- Memorandum of association
- Statement of capital
- Standard industry classification coding
Registering your UK company with Companies House can be done online and usually takes only 24 hours. If you register online it costs only £12. Alternatively, there are postal registration routes (at an increased fee), and a ‘same day’ service for which you pay a premium.
Legal obligations and responsibilities
Once you’ve registered your business you must also register for corporation tax within three months of starting trading. This can be done online. Your company accounts can also be posted online once you’re up and running.
You also need to register if you start employing people. This can take up to two weeks and must be done before you pay your employee for the first time. The British government’s guide on how to register as an employer is very helpful in this process. From here, you can also register your employees easily online.
As soon as you start to employ people, you need to get employers liability insurance. In addition to this, you have a duty as employer to pay above minimum wage, prepare a contract of employment, and check the individual’s legal right to live and work in the UK. A full list of employer responsibilities can be found on the government website.
Restaurant Regulations in UK
There is currently no law or regulations requiring you to obtain any formal training or qualifications before you open a restaurant. However, it’s important that you have the appropriate level of training (or supervision) to do your job effectively, efficiently, and safely.
When you’re running a restaurant, there are a number of licenses and certificates that you need to acquire in order to remain compliant with the relevant regulations.
- Food Hygiene Certificate – This certificate proves that you are aware of, and operating under, the appropriate food hygiene and health and safety regulations. This is an essential, legal requirement for any restaurant. It goes without saying that food hygiene laws are extremely comprehensive. With this in mind, when you’re setting up your restaurant business, you’ll need to think very carefully about where you set up and what equipment you buy. Remember that Environmental Health Officers make regular, often unannounced, visits to food-based businesses. If they think you’re not up to scratch, they have the power to close you down!
- Pest control regulations for restaurants You have a legal requirement to have “adequate procedures” in place to ensure pests are controlled. Read more in the Government’s legislation on The Food Safety (General Food Hygiene) Regulations.
- Food Premises Approval – If you restaurant handles any meat, fish, egg, or dairy products (so all restaurants aside from strictly vegan ones), you must be inspected and approved by your local council in order to obtain Food Premises Approval. You can apply for this license here.
- Restaurant insurance – You’ll need Public Liability Insurance to protect you in the event of legal action if your customers suffer personal injury or property damage because of your business. This insurance will cover your legal expenses or any compensation claims.
- PRS for Music license – If you play music for your customers or staff, you need to obtain legal permission from the relevant copyright owners. For this, you will need a PRS for Music license.
- Alcohol licence – If you plan to offer alcohol on your menu, you’ll need to obtain an Alcohol On-License, which will allow you to sell alcohol to be consumed on site. You’ll need to visit your local council website in order to find out more and apply for this license.
- Building Permit – If you decide to build your own bespoke premises or make additions or alterations to an existing structure, you’ll need a construction permit. Again, this will be obtained from your local council.
- Planning permission – In addition to gaining permission to make physical changes to a building, you will also need to check permission to use the building as a restaurant. Often, you will need planning permission to change from one use class to another if the building was not previously a restaurant. The standard ‘use class’ for a restaurant is A3, which is defined as ‘Use for the sale of food and drink for consumption on the premises.’ See more in the Government’s legislation on use class classification.
The Food Standards Agency (FSA) is the body appointed by the government to oversee all food safety standards. When you’re starting your own restaurant, they’re a great source of information and guidance. Their Safer Food, Better Business guide will help you to ensure that you comply fully with the law, whilst ensuring that your premises is safe for the public.
Takeaways have been a popular form of dining in Britain for a long time. Ordering a pizza, Chinese or other cuisine from a takeaway outlet is often considered a leisure occasion similar to eating out in a restaurant. UK households spend an average of around five British pounds per person per week on takeaway meals. Collectively, they spent a total of approximately 12 billion British pounds on takeaways in 2018.
With the emergence of online ordering technology and companies dedicated to restaurant delivery, the market has entered a new era. The delivered food market was estimated to be worth 8.2 billion British pounds in 2018, largely thanks to the rise of online delivery concepts. Although telephone orders still account for the largest share of orders, the amount of meal deliveries ordered online has increased dramatically!