union jack flag in front of big ban

How to do Business in the United Kingdom

An excellent way to grow your business is to join the global marketplace. The UK has a long and successful history in international trade, making it a great destination for US small businesses. The estimated GDP of the UK is over $2.9 trillion USD; it’s the fifth largest economy in the world, and the second largest in the EU. The UK has a population of over 64 million.

 

The UK isn’t only a gateway to other parts of the world. It’s an open market with a diversified economy that is also a large and dynamic marketplace. The UK government has consistently sent out a clear message that their country is “open for business.”

 

The most common exports from the UK include, in order: manufactured goods, fuels, chemicals, food, beverages, and tobacco. The common imports to the UK include: manufactured goods, machinery, fuels, and food.

 

The most common exports from the UK include, in order: manufactured goods, fuels, chemicals, food, beverages, and tobacco

 

The size of the market is significant and most consumers regularly use the internet for making a purchase, which provides many opportunities for US-based small businesses active in ecommerce. Indeed the UK market is similar enough that experts say that if you have a market in the United States, you almost certainly have a market in the UK.

 
 

Introduction to the UK

 

The United Kingdom (UK) of Great Britain and Northern Ireland comprises Britain, Scotland and Wales (Great Britain) and Northern Ireland. Each of these has its own legal system. Although the three systems broadly adopt the same approach to business, there are some important distinctions and accordingly, if you are planning to export/import in Scotland or Northern Ireland, it is important to seek expert advice. This guide will focus on Britain, as the major industrial centers are located there.

 

Note: In the UK they calculate GVA (Gross Value Added) rather than GDP (Gross Domestic Product), although both are measures of output. GDP = GVA + taxes on products – subsidies on products

 

Major Cities

 
Map of the uk
 

Greater London

London has a population of over 8 million, and is in the top thirty largest cities in the world. London is a global leader in the arts, commerce, education, entertainment, fashion, finance healthcare, media, professional services, research and development, tourism and transportation. It is the world’s largest financial center and it has a GVA (Gross Value Added) of over $500 billion USD, which would make it the sixth largest GDP in the world.

 

London is a very cosmopolitan city. Over 300 languages are spoken there. It’s the world’s most visited city as measured by passenger traffic. London is the world’s leading investment destination, home to more international retailers and high-net worth individuals than any other city in the world.

 

Manchester

Greater Manchester has a population of over 2 million and is the largest city in northwest Britain. Manchester is the largest sub-regional economy in the UK outside London. It represents more than $55 million USD of the regional UK GVA, which is more than Wales, Northern Ireland, or North East Britain. Manchester city center is a major center of trade and commerce in the UK. In a poll of British business leaders in 2006, Manchester was voted the best place to locate a business. The BBC has called Manchester, “Britain’s Second City.”

 

Birmingham

With a population of over 1 million, Birmingham is the second most populated city in the UK. It’s economy is the second largest in the UK with a GDP of over $120 billion USD. Although Birmingham grew to prominence as a manufacturing center, today it’s dominated by the service sector. Birmingham is the largest center in Great Britain for employment in public administration, education and health. After London and Leeds, it’s the third largest center for employment in business and finance.

 

Leeds

With a population of over 700 thousand, Leeds is the largest city in West Yorkshire, Britain. After London, Leeds is the largest legal and financial center in the UK. It contains more than 30 national and international banks. Leeds is the UK’s third largest manufacturing center, with sub-sectors including engineering, printing and publishing, food and drink, chemicals, and medical technology.

 

Over the next ten years, the economy of Leeds is forecast to grow by 25% with financial and business services set to generate over half of GVA growth over that period.

 
 

Currency

 

The currency in the UK is the pound sterling, commonly called the pound and its symbol is £ or GBP. There are 100 pence in a pound, with pence abbreviated to p. The pound usually trades at a higher rate than USD. It is the world’s oldest currency in continuous use.

 
 

Language

 

Although the language of the UK is English, there is an old saying that the US and Britain are “two nations divided by a common language.” The differences in English have some Brits saying to their US business associates: “you don’t speak English, you speak American.”

 

The most important differences to know about how English is used in the US and UK is vocabulary. There are several differences in how words are used.

 

The most important differences to know about how English is used in the US and UK is vocabulary. There are several differences in how words are used. For example, one doesn’t say a product is “on sale,” you say it’s “on offer.” In the US you call them “sneakers” whereas in the UK they are “trainers.” Other differences can be picked up on as you go along.

 

Please note that there are also differences in the manner of speech that you can read about in the Business Culture and Small talk sections.

 
 

Holidays in the UK

National holidays in the UK are typically called “bank holidays,” meaning days when the bank is closed.

 

HolidayDateObservance
New YearJanuary 1Nationwide
2nd JanuaryJanuary 2Scottland
Saint Patrick's DayMarch 17Northern Ireland
Good FridayFriday before Easter SundayNationwide
Easter MondayMonday after Easter SundayBritain, Northern Ireland, Scottland, and Wales
Easter TuesdayTuesday after Easter SundayNorthern Ireland
Victoria Day Monday on or before May 22Edinburgh Scottland
Spring Bank HolidayLast Monday in MayNationwide
Orangeman's DayJuly 12-13Northern Ireland
Summer Bank Holiday1st Monday in AugustScottland
Summer Bank Holiday3rd Monday in SeptemberBritain, Northern Ireland, Wales
Autumn Bank Holiday 3rd Monday in SeptemberScottland
Christmas DayDecember 25Nationwide
Boxing DayDecember 26Nationwide

 

Communication from the US

 

Email

Business emails in the UK tend to be similar to those in the US. Address people with “Mr.,” “Mrs.,” or “Miss” and their last name until directed to do otherwise. Use polite form: for example, do not address an email with “hey” or “hi guys” instead use “hello.” Short emails tend to be perceived as rude and long emails are too difficult to read, so keep your emails mid-length.

 

Making calls from the US

First dial 011, the US exit code. Next dial 44, the country code for the UK. Then dial the area code (2–5 digits). And finally the phone number (4–8 digits) to successfully contact UK partners.

 

Find a Supplier Online

Finding a supplier online is easy in the UK as the government provides a business directory. You can find a link to it in our useful links section at the bottom of this page.

 
 

Traveling to the UK

Visas

Visas are not required for US citizens doing business in the UK and staying less than three months. For longer stays refer to the UK site for visas in our useful links section.

 

Using a Cell Phone in the UK

In general it is recommended to buy a SIM card when traveling in the UK or to use an international SIM card as roaming can be expensive. In the UK, all mobile networks use GSM, so if you have a CDMA handset you won’t be able to connect it to a UK mobile network.

 

If you want to know if you are on GSM or CDMA then you just need to know which carrier you are with. In the USA, for example, Verizon & Sprint typically use CDMA while AT&T and T-Mobile use GSM. It is best to check with your carrier to find out which system your phone uses.

 

The Internet

Internet is everywhere in the UK. You can buy a wifi dongle with a prepaid sim card in any mobile phone store on any network. The price is reasonable – about £15 for the dongle itself, which include 1GB of data. Then you just pay for data packs (£7-10 per GB of data depending on the network).

 

Most hotels offer wifi these days. Most small hotels include it into the price, larger ones charge for it. In addition, the majority of coffee shops, cafes and even McDonalds offer free wifi for their customers.

 

Trade Shows: The Two Major Exhibition Sites in London

 

The UK, and London in particular is home to trade shows on nearly every topic you can imagine. Here are the two major exhibition sites in London where you can search for trade shows:

ExCel London aims to be the meeting place for world leading events. It hosts ICE, the largest gambling (called “gaming” in the UK) trade show in the world with over 30,000 visitors from over 150 countries.

 

Olympia London has a capacity of 10,000 and is home to many trade shows including Pure London, the largest fashion trade show in the UK and the London Book Fair, the global marketplace for rights negotiation and the sale and distribution of content across print, audio, TV, film and digital channels.

 
 

Business Culture

 

English people tend to be “civilized,” meaning they are well-mannered and well-educated. They are generally an understated people, cool, detached, often hard to read and very class-conscious.

 

Polite and Courteous

British people are typically very polite and are slightly more formal than people in the US. The British value politeness and courtesy and, as a consequence, will express a significant amount of respect when interacting in a business situation.

 

They maintain good posture and have what is called “a stiff upper lip,” which means they remain resolute and austere in the face of adversity. In other words, they don’t openly complain in public.

 

British people are typically very polite and are slightly more formal than people in the US. The British value politeness and courtesy and, as a consequence, will express a significant amount of respect when interacting in a business situation.

 

Sometimes US people can find British people to be a little too polite, as when asked for their honest opinion they may resist providing negative feedback in public. It is therefore essential to read between the lines and seek out the honest opinions of relevant parties.

 

Moreover, this politeness also comes with a hint of reservation. Not only are Brits courteous and unwilling to reveal their true opinion, but they are also somewhat withdrawn. British people can be difficult to read and often hold their cards close to their chests. Their gestures or expressions may lead you to believe they are in full agreement with you when exactly the opposite is true.

 

“While working in the UK, I often saw Americans being interpreted as ‘fake’ because they were always smiling and frequently used exaggerations to make their points. The English are more reserved with their smiles and their praise to the point that they might come across as negative to American eyes.” –Jodi Moran

 

 

Because of this cultural difference, US importers/exporters need to ensure that they are sending a clear message.There is no room for assumptions and no hidden meanings that could be misinterpreted.

 

Indirect Statements

Out of politeness, British statements are often indirect which can be confusing to a US importer/exporter. They avoid commands in favor of suggestions. For example a senior business person might say “you can finish that later” when really he means you must finish it later. In a meeting, if a British importer/exporter says “that’s an interesting point, but…” they probably in fact disagree with you.

 

It is wise to use indirect speech yourself when doing business in the UK. This way you will appear more accommodating and not rude or arrogant.

 

Well-educated and Class-Conscious

British people are well-educated. Even service people often have good educations. For example, to become a London taxi driver, you must first pass a difficult test in the geography of the city. (After one visit to London, you’ll know why!)

 

The British education system is stringent. It’s one of the best in the world and it shows. Many are avid readers. Hint: go to an international newsstand and buy the Guardian, a London newspaper. You’ll get some insight into how English is used differently and that the culture is quite bookish.

 
hand holding globe with a graduation hat on top
 

Although it is well known in Britain that the best education is a public one (which means a private school there), many can’t afford this education. Between this fact and the lineage of the queen you can expect that class is very important in Britain. Not only is class important, but there are several regional accents that can help determine where someone is from and consequently their class. For this reason never comment on people’s differing accents, as that can be the same as commenting on their class.

 

Privacy and Personal Space

The people of Britain value their privacy greatly. Although people may appear to be open in public and will talk to strangers, the implicit message permeating the culture is “please do not interfere with my personal space.” For example, people will often avoid sitting next to another person on public transit or may apologize if they touch someone accidentally. It is considered rude to put yourself in close proximity to the person with whom you are speaking.

 

The UK may be multicultural, but it is not a melting pot. Expect people to acknowledge differences especially with respect to nationalities.

 

“Working in the UK, I had to get used to the stereotyping banter between the English and other European cultures you often hear even in the workplace.” –Jodi Moran

 

 

The private nature of the British causes many people to be wary of making new friends. If a US importer/exporter want to make valuable connections, they must be patient as this can take more time than it would at home.

 

Hint: A great way to enhance local friendships is at the pub, as most socializing in British culture takes place there. It’s also a great way to loosen tongues if you want to hear someone’s true opinion.

 

 

Humor and Banter

Humor is an essential part of British working culture. One should be careful to use humor only in appropriate settings, and an office meeting is not usually one of them.

 

Humor can often be sarcastic and self-deprecating, but is generally used to “lighten the mood.” Humor is often understated, which can make it seem that a British importer/exporter is serious when in fact they are only kidding.

 

Humor is an essential part of British working culture. One should be careful to use humor only in appropriate settings, and an office meeting is not usually one of them<br />

 

Overtly, a British importer/exporter may say something that appears insulting, when in fact they are teasing, which they call “taking the piss.” The best way to handle this situation is to reply in kind, and thereby develop a banter with your British counterpart, strengthening the relationship.

 

Generally, it is nearly impossible to develop a thorough understanding of British culture during a short business trip. In order to develop a valuable business relationship with your UK counterparts, you should take a long-term approach, respect their values of privacy and politeness, and look for shared interests.

 
 

Business Communication

 

The First Meeting

 

Attire

Offices in Britain, UK have different dress codes depending on the culture of the industry. For example, the dress code in IT is casual while in finance it is much more formal. In general, business clothing is conservative with both sexes wearing suits or women wearing dresses. It is better to overdress than to underdress in Britain.

 

Timing

Time is highly valued in British business; wasted time is viewed as a wasted resource. Punctuality is therefore very important, and almost everyone will either arrive on time or a few minutes early for a meeting. If you must arrive a few minutes late, it is generally okay to apologize to the room when you arrive. Lateness beyond a few minutes should be reported to the organizer beforehand.

 

Introductions

A firm handshake is the usual greeting for both men and women. Address people the way they introduce themselves, whether it be by their first name or title and last name. Never address someone by their first name unless asked to do so. Maintaining eye contact during the handshake is a good idea, but do not stare too hard, as British people usually make eye contact less frequently than people in the US.

 

Business Cards

Although business cards have decreased in popularity, they are still frequently exchanged at business meetings, especially if this is the first time meeting an importer/exporter. Receive them gratefully, and take a moment to glance at them as a sign of respect. Since not everyone has business cards, do not be offended if one is not offered.

 

Talking at Meetings

Foreigners often find conversations in the UK to be shorter and about general topics such as the weather or your trip to Britain, which are always popular and often used as “icebreakers.” British people like facts and are quite reserved.

 

British people do not use slang and don’t act overly familiar with people they just met. You must develop a relationship before you can use humor and banter with British people.

 

British people do not use slang and don’t act overly familiar with people they just met. You must develop a relationship before you can use humor and banter with British people

 

Most meetings will follow an agenda that has been distributed beforehand. Discussion will tend to stick to the agenda, perhaps with an informal chat of greetings at the beginning of the meeting. It is polite to take notes during the meeting.

 

There may be an AOB section of the agenda, which stands for “any other business.” It is at this time that topics not on the agenda can be discussed.

 

Gifts

It is uncommon to give gifts in business situations in Britain. Some businesses prohibit gift giving on legal grounds because it can be misinterpreted as bribe.

 

If you want to give a gift as a “thank you” to a business be sure the gift is small and not too expensive. Suitable gifts might include flowers, chocolates, or something from home.

 
 

Making Payments

 

The fastest, easiest, most inexpensive, and completely safe way to pay your supplier in the UK is to use Veem. Veem is safer than your traditional bank, and it allows you and your supplier to track the payment from end to end. This will help build rapport with your suppliers as they will always know when they’re getting paid.

 

Using Veem to make a payment is as simple as sending an email.

 

With Veem you’re assured that our staff has verified your supplier by confirming their bank details and making sure that they have passed all regulatory compliance requirements.

 
 

Regulations and Permits

 

Importing Goods from the UK

 

Hire a Customs Broker

A customs broker acts as your liaison with the government, takes care of the paperwork of importing, and helps you navigate any regulations. They can also help you to estimate import costs and how long your shipment will take to be imported. Failing to comply with customs regulations can be very costly, so just be sure to add your custom broker’s fee as an expense you must cover with the sale of your goods. You can find links to help you find a broker in our useful links section.

 

Exporting Goods to the UK

When exporting goods to the UK from the US, you’ll need to:

  • Find out the commodity code to classify your goods for tax and regulations
  • Register for an EORI number if you don’t have one – it usually takes 3 working days
  • Declare your imports to customs – most businesses use a courier or freight forwarder to do this for them
  • pay VAT and duty

 

You may also need an import licence for restricted goods like firearms.

 

VAT (Value Added Tax)

Value Added Tax or VAT is a goods and services tax levied in the UK by the national government. VAT is an indirect tax because it is paid by the seller (or business) to the government rather than by the purchaser who ultimately bears the tax burden.

 

Value Added Tax or VAT is a goods and services tax levied in the UK by the national government. VAT is an indirect tax because it is paid by the seller (or business) to the government rather than by the purchaser who ultimately bears the tax burden.

 

VAT is levied on most goods and services provided by registered businesses in the UK and some goods and services imported from outside the EU. The default rate is 20% but some goods and services are taxed at a reduced rate so it’s recommended you find out the rate for your specific product. You can find information on rates on the government of UK site, in the useful links section.

 

Importer of Record

The importer of record is the business responsible for (1) ensuring the imported goods comply with local laws and regulations, (2) filing a completed duty entry and associated documents and (3) paying the assessed import duties and other taxes on those goods. It is advisable that you ask the business in the UK to whom you are importing/exporting to take on this role.

 

However, if there’s no way around your company taking on the importer-of-record obligation, it means you will have to become VAT registered in the United Kingdom. You don’t actually have to be in the UK for this, but it does mean you have to comply with the regulations of being a VAT-registered company. Which means more paperwork, including periodic filings, even if you haven’t made any sales.

 

If you’re set up to charge VAT, of course you’ll then have to design your website to facilitate that, among other things. If you decide you can’t or don’t want to be VAT-registered, you’ll have to pay the standard rate which is 20%, and you can’t recoup it

 

And if you’re set up to charge VAT, of course you’ll then have to design your website to facilitate that, among other things. If you decide you can’t or don’t want to be VAT-registered, you’ll have to pay the standard rate which is 20%, and you can’t recoup it.

 

Looking to get some initial advice? It’s probably about 4 to 8 hours of advisory research for a specific transaction—so about $1,000 to $2,000 to identify what your professional issues are and the economic ramifications of not getting it right. It may turn out that none of these issues apply to you, but it’s easier (and cheaper) to find this out before you start incurring fines and taxes you’ve never heard of.

 

You can get free advice from the U.S. Commercial Service, found in our useful links section below. The service helps US companies expand into foreign markets. Eighty-five percent of the service’s clients are small to mid-size businesses.

 
 

Useful Links

 

About the UK

CIA World Factbook: UK
UK Office of Statistics

 

Holidays in the UK

Up Coming UK Holidays

 

Visas

Tool for Checking if you need a UK Visa

 

Guide to Exporting to the UK, provided by the US government:

Country Commercial Guide to the UK

 

UK supplier directory, provided by the UK government:

Online Supplier Directory

 

Regulations on Importing to the US

SBA: Office of International Trade

 

Finding a Customs Broker for Importing from the UK

National Customs Brokers and Forwarders Association of America

International Federation of Customs Brokers Associations

 

Rules and Regulations for Exporting to the UK

VAT Rates

HOW THE EU’S VALUE ADDED TAX (VAT) IMPACTS U.S. EXPORTS

US Commercial Service

 

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