• Hypermotion

Cities of Innovation: Birmingham

Additional information

ICT Infrastructure

Birmingham is the first major city in the UK ready to trial new 5G applications and services at scale.

University links and access to talent

Within an hour of Greater Birmingham, there are 20 leading universities.

Costs and availability of workspace

Birmingham is constantly paving way for unique, co-working spaces. Its Innovation Birmingham Campus is the largest and fasting growing dedicated tech campus in the country. The Custard Factory is a hive of digital and creative activity, with a community of over 500 businesses that include innovative start-ups as well as household names like ASOS. Set in an authentic heritage building, the Old Print Works offers not only a beautiful working space, but a like-minded community for creative types. Alpha Works was the first flexible work space in Birmingham, and it’s still one of the most impressive – located in Birmingham’s iconic Alpha building. Part innovation lab, part social enterprise community, Impact Hub is a centre for collaboration, from £20 a month.

City support for start-ups and SMEs

Urban Challenge is an open call competition for technology startups to develop new ideas to make the West Midlands a better place to live and work. The competition gives the chance to work directly with officials from the West Midlands Combined Authority, and candidates pitch directly to the mayor. Startups win a prize package worth over £20,000 plus a guaranteed three-month pilot with the West Midlands Combined Authority, and support in developing the proposition, pitch and sales strategy.

— Venture capital and loans provided by Finance Birmingham

— Main Incubators include the Entrepreneurs for the Future incubation programme and Serendip Smart City Incubator at Innovation Birmingham Campus

— Local community networks such as Silicon Canal

— The Greater Birmingham and Solihull Growth Hub provides a single point of contact for the region’s business support facilities

— The city centre’s Enterprise Zone and economic zones offer incentives that many start-ups can take advantage of, such as rates relief.

Financial support and access to investors & accelerators

Business Birmingham – the region’s inward investment agency – has teams dedicated to helping new businesses thrive in Birmingham. The GBSLEP Growth Hub also provides co-ordinated, effective first-class business advice, funding and support services across Greater Birmingham.

How to set up a business: a quickfire guide

What are my options?

While there are numerous business forms, the most common initial start-up structures are as a sole trader and or a private company limited by shares.

 

A sole trader is the simplest structure as the individual does not need to register the company with a formal constitution. Sole traders enjoy minimal paperwork and benefit from the flexibility of moulding their business plan without consulting shareholders. The downfall of this structure is that sole traders are personally liable for all the debts and contractual obligations of the business.

 

Private companies limited by shares give a business its own legal personality. This means that the business owners are not personally liable for the company’s debts. Companies with this structure are also able to raise capital more easily due to tax incentives and greater credibility as a result of a company’s professional image. Although this structure comes with additional paperwork, the UK’s efficient online company system has made the submission of paperwork a relatively simply task.

What do I need to set up a company?

To incorporate a company, an individual needs to submit the following:

Company name: this must not be too similar to another registered name.

Registered address: you must provide a UK office address as the address to which all business letters and invoices are sent. While there needs to be a registered address in the UK, an international director does not need to be present at the address. The director only needs to ensure that it is a physical address from where they can receive mail. Many businesses use their accountant’s address where post can then be forwarded to the director or managed by the accountant itself.

Director: the name of at least one director. Directors need to be at least 16 years old. Directors do not need to reside in or even have visited the UK. Shares: the details of share capital with at least one initial shareholder.

Company documents: a Memorandum and Articles of Association are the legal documents which confirm company formation and dictate the rules by which the company will be run. While these may seem daunting, the UK government’s website (gov.uk) has a memorandum template and model articles which a director may copy and complete easily and quickly for submission.

How much does it cost?

The entire online registration process costs £12 (€14) and it takes up to 24 hours for the company to be registered.

Tax rates

Following registration, the company will be subject to a 19% tax rate on company profits. Additionally, the company may be liable to pay VAT if its taxable turnover exceeds £85,000 annually. VAT rates vary depending on services or goods rendered with the maximum VAT rate being 20%.

 

The UK government strongly supports start-ups and offers various tax relief and support schemes. Tax relief is usually possible on spending that is entirely for business use such as certain business travel or machinery. R&D tax credits are available to businesses which are working to advance science or technology. A company that profits from its patented invention could also benefit from Patent Box in which corporation tax is lowered from 19% to 10%.

 

Small businesses can also benefit from the Seed Enterprise Investment Scheme which offers both income and capital gains tax relief to the company’s investors.

 

To raise further capital, the government arm Innovate UK drives growth by supporting UK- based businesses through funding. To date, the scheme has invested around £2.5 billion. Businesses may participate through regular innovation competitions, which focus on different sectors.

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