By Amy LeJune, Managing Director, Head of Corporate Services, UK
Establishing a presence in the UK is an exciting step, whether you’re expanding operations, raising capital or growing your investor base. There are, however, strict regulatory guidelines that can lead to serious fines or even personal liability for directors if they aren’t followed.
Many overseas firms assume UK regulations will be similar to those in the U.S. or Europe, only to discover key differences too late. The UK’s Financial Conduct Authority (FCA) collected £176 million in fines for compliance failures in 2024 alone.
For C-suite executives and Controllers, staying compliant isn’t just about avoiding penalties. It’s about protecting your firm’s reputation and long-term success. In this article, we’re covering the top five regulatory pitfalls international firms overlook when expanding into the UK—and how to avoid them.
#1: Failing to meet reporting and disclosure requirements
UK financial reporting rules are highly transparent. Every UK company must:
- File financial statements with Companies House within nine months of its financial year-end. For listed companies it’s within six months of its financial year end
- Ensure statements comply with UK GAAP or IFRS and meet requirements from the Companies Act 2006
- Undergo an audit if they exceed the audit exemption thresholds
Many overseas CFOs assume UK corporate filings are private, but these disclosures are publicly available. If a filing is late or doesn’t meet requirements, Companies House can reject it, leading to delays and financial penalties.
Key takeaway: Investors and regulators can easily access your filings, so accuracy and compliance are critical.
#2: Overlooking corporate governance and compliance obligations
Corporate governance in the UK involves ongoing reporting and mandatory filings throughout the company’s lifecycle.
Key governance requirements include:
- Filing an annual confirmation statement with Companies House
- Reporting any changes to directors, share capital, or registered addresses
- Maintaining a physical registered office in the UK (publicly available) and a registered email address (not shared with the public)
- Listed companies must adhere to the UK Corporate Governance Code
The Economic Crime and Corporate Transparency Act 2023 (ECCTA) gives Companies House greater enforcement powers to investigate and enforce compliance. Firms that fail to meet governance requirements risk further scrutiny, financial penalties, or even being struck off the register.
Key takeaway: UK regulators take corporate governance seriously. Failure to file updates or maintain proper records can trigger enforcement actions.
#3: Misunderstanding director responsibilities and risks
Being a director of a UK company is more than a title. Directors assume legal and financial responsibility for their actions on behalf of the firm.
Directors must:
- Act in the best interests of the company and follow Companies Act 2006 fiduciary duties
- Ensure timely tax filings and corporate disclosures
- Maintain proper financial and statutory records
Failure to comply can result in personal liability, including penalties like director disqualification or even criminal penalties for breaches like wrongful trading, financial misstatements, or fraud.
Key takeaway: In the UK, a director role comes with enforceable legal duties and personal liability.
#4: Getting payroll and pension compliance wrong
Payroll and pensions come with strict compliance rules. Before paying employees, a UK company must:
- Register as an employer with HMRC before the first payday
- Use HMRC-recognised payroll software and report wages through Real-Time Information (RTI)
- Administer an auto-enrolment pension scheme. Employers must contribute at least 3% of an 8% total deduction
Failure to comply with auto-enrolment pension rules can carry significant financial penalties. Payroll errors, incorrect tax deductions, or late reporting to HMRC can trigger compliance investigations.
Key takeaway: Don’t assume UK payroll works the same way as it does elsewhere. Mistakes in pension contributions or payroll tax filings can be costly.
#5: Missing tax deadlines
Every UK company must:
- File a Company Tax Return with HMRC within 12 months of the financial year-end
- Register for VAT if applicable and submit VAT returns
- Ensure payroll tax, insurance coverage, and other employer obligations are met
Failing to meet tax obligations can lead to fines, HMRC audits, and reputational damage—especially for firms that handle investor capital.
Key takeaway: UK tax laws are complex and differ significantly from other jurisdictions—even those in the EU.
How IQ-EQ can help
The UK is a strategic market for investment firms, private equity, and family offices, but its compliance and governance rules require specific expertise.
IQ-EQ simplifies UK expansion with expert support in:
- Corporate governance, secretarial and registered office services
- Financial administration and compliance
- Payroll, accounting and VAT services
- Advice on regulatory approvals and meeting FCA requirements
From incorporation to day-to-day administration, we’ll help ensure compliance with your statutory obligations so you can focus on growth. Get in touch with our team today.
