Doing Business 2019 United Kingdom Economy Profile United Kingdom Page 1 Doing Business 2019 United Kingdom Economy Profile of United Kingdom Doing Business 2019 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality Page 2 Doing Business 2019 United Kingdom About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business offers detailed subnational reports, which exhaustively cover business regulation and reform in different cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The first Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. More about Doing Business (PDF, 5MB) Page 3 Doing Business 2019 United Kingdom Ease of Doing Business in DB 2019 Rank Region OECD high income 190 1 United Kingdom Income Category High income 9 DB 2019 Ease of doing business score Population 66,022,273 0 100 City Covered London 82.65 DB 2019 Ease of Doing Business Score 0 100 82.75: United States (Rank: 8) 82.65: United Kingdom (Rank: 9) 78.91: Ireland (Rank: 23) 78.90: Germany (Rank: 24) 77.80: Regional Average (OECD high income) 77.29: France (Rank: 32) Note: The ease of doing business score captures the gap of each economy from the best regulatory performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100 represents the best performance. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - United Kingdom 1 7 17 15 14 19 23 32 30 32 28 42 55 82 Rank 109 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Ease of Doing Business Score on Doing Business topics - United Kingdom 100 94.58 96.45 93.76 87.14 80.29 80.27 80 75.34 75.00 75.00 68.69 Score 60 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Page 4 Doing Business 2019 United Kingdom Starting a Business This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and formally operate To make the data comparable across economies, several assumptions about the a company (number) business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes. • Preregistration (for example, name verification or reservation, notarization) The business: • Registration in the economy’s largest business - Is a limited liability company (or its legal equivalent). If there is more than one type city of limited liability company in the economy, the most common among domestic firms • Postregistration (for example, social security is chosen. Information on the most common form is obtained from incorporation registration, company seal) lawyers or the statistical office. - Operates in the economy’s largest business city. For 11 economies the data are • Obtaining approval from spouse to start a business or to leave the home to register the also collected for the second largest business city. company - The entire office space is approximately 929 square meters (10,000 square feet). - Is 100% domestically owned and has five owners, none of whom is a legal entity; • Obtaining any gender specific document for has a start-up capital of 10 times income per capita and has a turnover of at least company registration and operation or national 100 times income per capita. identification card - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does not perform foreign trade Time required to complete each procedure activities and does not handle products subject to a special tax regime, for example, (calendar days) liquor or tobacco. It does not use heavily polluting production processes. • Does not include time spent gathering - Leases the commercial plant or offices and is not a proprietor of real estate and the information amount of the annual lease for the office space is equivalent to the income per capita. • Each procedure starts on a separate day (2 procedures cannot start on the same day) - Does not qualify for investment incentives or any special benefits. - Has at least 10 and up to 50 employees one month after the commencement of • Procedures fully completed online are recorded operations, all of whom are domestic nationals. as ½ day - Has a company deed that is 10 pages long. • Procedure is considered completed once final document is received The owners: • No prior contact with officials - Have reached the legal age of majority. If there is no legal age of majority, they are assumed to be 30 years old. Cost required to complete each procedure (% of - Are sane, competent, in good health and have no criminal record. income per capita) - Are married and the marriage is monogamous and registered with the authorities. - Where the answer differs according to the legal system applicable to the woman or • Official costs only, no bribes man in question (as may be the case in economies where there is legal plurality), the • No professional fees unless services required by answer used will be the one that applies to the majority of the population. law or commonly used in practice Paid-in minimum capital (% of income per capita) • Funds deposited in a bank or with third party before registration or up to 3 months after incorporation Page 5 Doing Business 2019 United Kingdom Starting a Business - United Kingdom Standardized Company Legal form Private Limited Company (Ltd) Paid-in minimum capital requirement GBP 0 City Covered London Indicator United Kingdom OECD high Best Regulatory income Performance Procedure – Men (number) 4 4.9 1 (New Zealand) Time – Men (days) 4.5 9.3 0.5 (New Zealand) Cost – Men (% of income per capita) 0.0 3.1 0.0 (Slovenia) Procedure – Women (number) 4 4.9 1 (New Zealand) Time – Women (days) 4.5 9.3 0.5 (New Zealand) Cost – Women (% of income per capita) 0.0 3.1 0.0 (Slovenia) Paid-in min. capital (% of income per capita) 0.0 8.6 0.0 (117 Economies) Figure – Starting a Business in United Kingdom and comparator economies – Ranking and Score DB 2019 Starting a Business Score 0 100 95.91: Ireland (Rank: 10) 94.58: United Kingdom (Rank: 19) 93.27: France (Rank: 30) 91.23: United States (Rank: 53) 91.19: Regional Average (OECD high income) 83.58: Germany (Rank: 114) Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. Page 6 Doing Business 2019 United Kingdom Figure – Starting a Business in United Kingdom – Procedure, Time and Cost Time (days) Cost (% of income per capita) 4.5 0.045 4 0.04 Cost (% of income per capita) 3.5 0.035 3 0.03 Time (days) 2.5 0.025 2 0.02 1.5 0.015 1 0.01 0.5 0.005 0 0 1 2 *3 4 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 7 Doing Business 2019 United Kingdom Details – Starting a Business in United Kingdom – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Check availability of unique company name, complete application form Less than one day GBP 12 for online IN01, and file for registration with Companies House (online procedure) registration Agency : Companies House Company founders have the option to check for unique company name and file for registration themselves, or to retain incorporation professionals to do so. The option to complete registration is through paper application or electronically. In case the company chooses to file for incorporation itself online, model articles of incorporation and company memorandum are generated automatically by the registration website www.gov.uk/register-a-company-online. In addition the above forms, all companies must provide the following information to the relevant Registrar of Companies (i.e., for England and Wales, Scotland, or Northern Ireland): • Statement of compliance with all requirements of the 2006 Companies Act; • Application form IN01, which includes: o proposed company name; o country of registration office (e.g. England and Wales (or Wales), Scotland or Northern Ireland); o Whether the liability of the members is to be limited and if so whether by shares or guarantee; and; o Whether the company is public or private; • In the case of a company with a share capital, the application must also include a statement of the capital and initial shareholdings, including the name and address of the subscriber. • A statement of the proposed officers, being the first director and company secretary (unless in the case of a private company, where the appointment of a company secretary is optional); • A statement of the intended registered office address. On completing the online form if the company name provided cannot be used the website will alert you to this and you have the option of selecting another name. Fees for filing incorporation documents are as follows: GBP 12 for a Web filed incorporation and GBP 40 for paper filers (or GBP 100 for a same day service). The standard digital registration fee through a third party agent is GBP 10 (or GBP 30 for a same day service). There is no requirement for a company to use a third party agent. Third party agents may charge additional fees as well as the standard registration fee. In case the company chooses to retain incorporation agents to file for registration, in addition to the above documents, the application file must include the agents’ name and address. Note that in case the company wants to amend model articles of association or company memorandum it cannot file for registration online via www.gov.uk/register-a-company-online. Instead, the company must use professionals to compose incorporation documents and submit them via specialized software to Companies House. From 30 June 2016, new companies have to provide their People with Significant Control information as part of the incorporation process. The data on beneficial ownership will be accessible and searchable from the database of Companies House. 2 Contact HMRC and register for VAT Less than one day no charge Agency : HMRC (online procedure) A business will need to register for VAT if its taxable goods and services supplied within the UK for the previous 12 months is more than the current registration threshold of GBP 85,000 (as of April 2016) or the business expects it to go over that figure in the next 30 days alone, it must register for VAT. However, the business may also voluntarily choose to register for VAT if its VAT taxable goods fall under the GBP 85,000 threshold. Most businesses, including Limited Companies, can register for VAT account online at: https://online.hmrc.gov.uk/registration or send paper forms through the post. Most applications for VAT registration can be completed online but there are some circumstances where a business has to apply by post. To register online for VAT or use other VAT online services, a business will first need to sign up for HMRC Online Services or the Government Gateway. Page 8 Doing Business 2019 United Kingdom 3 Contact HMRC and register for PAYE 3 days, no charge Agency : HMRC simultaneous with The company must contact the HMRC to set up a contribution scheme for previous procedure national insurance and pay-as-you-earn (PAYE) tax, which deducts tax from employee wages or salary. The company will be issued with an activation PIN within 5 business days – typically less - and will have to activate this PIN within 28 days (or else request a new PIN). The company will use the PIN to register and enroll online. For security reasons, a check is run on the data provided. A small percentage of registrations who fail the security check can take longer. Otherwise, activation is instant. Since 6 April 2013, companies will need to report their PAYE in real time. This means that companies must either report online or require their accountants to submit reports every time they pay their employees. 4 Sign up for employer’s liability insurance 1 day no charge Agency : Insurance company The Employers’ Liability (Compulsory Insurance) Act of 1969 requires all employers in the United Kingdom to maintain employers’ liability insurance from an approved insurance company. The minimum legal requirement for employers’ liability insurance is a limit of indemnity of GBP 5,000,000. In addition, a fine of GBP 2,500 per day can be imposed if employer's liability insurance is not taken out. The Employers’ Liability (Compulsory Insurance) Act of 1969 requires that proof of insurance be posted at the workplace. Since October 1, 2008, it is possible to display this information electronically, although a company that wishes to do this will need to ensure that its employees know how and where to find the certificate and have reasonable access to it. Takes place simultaneously with previous procedure. Page 9 Doing Business 2019 United Kingdom Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2018. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the (number) construction company, the warehouse project and the utility connections are used. • Submitting all relevant documents and obtaining The construction company (BuildCo): all necessary clearances, licenses, permits and certificates - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second • Submitting all required notifications and receiving largest business city. all necessary inspections - Is 100% domestically and privately owned; has five owners, none of whom is a • Obtaining utility connections for water and legal entity. Has a licensed architect and a licensed engineer, both registered with sewerage the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or • Registering and selling the warehouse after its completion topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse Time required to complete each procedure upon its completion. (calendar days) The warehouse: • Does not include time spent gathering information - Will be used for general storage activities, such as storage of books or stationery. - Will have two stories, both above ground, with a total constructed area of • Each procedure starts on a separate day— approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 though procedures that can be fully completed meters (9 feet, 10 inches) high and will be located on a land plot of approximately online are an exception to this rule 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the • Procedure is considered completed once final warehouse is valued at 50 times income per capita. document is received - Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further • No prior contact with officials documentation or getting prior approvals from external agencies, these are counted Cost required to complete each procedure (% of as procedures. income per capita) - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements). • Official costs only, no bribes The water and sewerage connections: Building quality control index (0-15) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there • Quality of building regulations (0-2) is no water delivery infrastructure in the economy, a borehole will be dug. If there is • Quality control before construction (0-1) no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control during construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average • Quality control after construction (0-3) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 • Liability and insurance regimes (0-2) gallons) a day. • Professional certifications (0-4) - Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 10 Doing Business 2019 United Kingdom Dealing with Construction Permits - United Kingdom Standardized Warehouse Estimated value of warehouse GBP 1,517,915 City Covered London Indicator United Kingdom OECD high Best Regulatory income Performance Procedures (number) 9 12.7 None in 2017/18 Time (days) 86 153.1 None in 2017/18 Cost (% of warehouse value) 1.1 1.5 None in 2017/18 Building quality control index (0-15) 9.0 11.5 15.0 (3 Economies) Figure – Dealing with Construction Permits in United Kingdom and comparator economies – Ranking and Score DB 2019 Dealing with Construction Permits Score 0 100 80.29: United Kingdom (Rank: 17) 79.30: France (Rank: 19) 78.16: Germany (Rank: 24) 77.88: United States (Rank: 26) 77.49: Ireland (Rank: 28) 75.41: Regional Average (OECD high income) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators. Figure – Dealing with Construction Permits in United Kingdom – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 0.6 80 0.5 Cost (% of warehouse value) 70 60 0.4 Time (days) 50 0.3 40 30 0.2 20 0.1 10 0 0 1 *2 3 4 5 6 *7 8 9 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 11 Doing Business 2019 United Kingdom Figure – Dealing with Construction Permits in United Kingdom and comparator economies – Measure of Quality 15 14.0 13.0 11.2 11.5 Index score 9.5 10 9.0 5 0 United Kingdom France Germany Ireland United States OECD high income Details – Dealing with Construction Permits in United Kingdom – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Obtain planning permission 56 days GBP 8,012 Agency : Planning Department of Local Authority BuildCo must obtain planning permission from the local planning authority. In London, the decision-maker is the relevant London borough where the site is located. There are 33 boroughs in Greater London. The planning application must be accompanied by a plan of the site, drawings showing the proposed development, and any other information the local authority considers necessary. The local authority publishes a list with the information it considers necessary on its website, so that applicants know what is required of them. The relevant legislative framework is the Town and Country Planning (Development Management Procedure) (England) Order 2015. If BuildCo is submitting a paper application, it must also provide at least 3 copies of the accompanying documents. Alternatively, BuildCo can apply online via the Planning Portal, which accepts electronic planning applications on behalf of all London boroughs, using a standard application form that was introduced across England in 2008. If it applies electronically, no further copies are required. A fee is charged for the planning application, based on the amount of floor space that would be created by the scheme. The size of BuildCo's proposed development falls below the threshold for a “major application”, which means that the time frame for a decision is 8 weeks rather than 13. During this period, the local planning authority will publicize the application in the surrounding area and consult a number of statutory consultees -- bodies with a specialist responsibility such as nature conservation, heritage protection, highways -- who may wish to comment on the acceptability of the proposal from their perspective. The local authority accepts these comments and the comments of any local people who wish to comment on the application. They will be taken into account in the decision to grant or refuse permission. If no decision is made within 8 weeks, or if the authority decides to refuse permission, the applicant is entitled to appeal to the Secretary of State. Additionally, in April 2015 the Government made permanent a previously time limited change to 'permitted development' rights allowing businesses to extend (with certain limits) industrial and warehouse buildings without having to obtain express planning permission (Town and Country Planning (General Permitted Development) (England) Order 2015). Page 12 Doing Business 2019 United Kingdom 2 Hire an Approved Inspector 1 day GBP 2,964 Agency : Approved Inspector BuildCo signs a contract with an Approved Inspector. Approved Inspectors (AI) are companies or individuals authorized under the Building Act 1984 to carry out building control work in England and Wales. An Approved Inspector will: • Advise BuildCo on how the building regulations apply to its work (to a degree) • Check plans for compliance with building regulations • Issue a planning certificate (if requested) • Inspect the work as it progresses • Issue a final completion certificate (if requested) The building control process was extended under the Building Act 1984 to include AIs as well as Local Authorities. Currently, there are 91 AIs on CICAIR Limited's register covering England and Wales, accounting for about 60% of all building control work. AIs are licensed by CICAIR Limited for every 5 years. A list of AIs is available from the Construction Industry Council website. Local Authorities have statutory time limits of 6 to 8 weeks for approving plans while AIs do not have any time limits so may provide a faster turnaround. By hiring AIs it eliminates need for companies to deal with the Building Control Department at the Local Authority. However, the Local Authority is still responsible for the enforcement of the regulations. AIs usually operate nationally and bring consistency of interpretation of the Building Regulations. While the planning permission (consent) is being obtained from Planning Department in Local Authority, the AI sends an Initial Notice to the Building Control Departement of Local Authority to inform them that it will take responsbilty over the building control process. The Local Authority Building Control Departement has 5 days in which to reject the notice. If the Initial Notice is not rejected within 5 days construction work may begin. AI, for BuildCo's case, would conduct approximately 8-9 inspections at various stages of construction on a risk assessment basis. AIs are in competition with local authority building control and have no restrictions on how much they can charge. AI fees are usually lower than local authority building control who are covered by the Building (Local Authority Charges) Regulations 2010 which requires local authorities to fix their charges by means of a scheme, full cost recovery and the fact that the user should pay for the actual service they receive. The cost for the services of AI is comprised of several elements and is mostly charged on a hourly rate. The below estimate is a sample of what an average cost breakdown by an AI looks like: • Plan checking: (16 hours x GDP 60) = GBP 960.00 • Inspections: (9 sessions x 2h x GBP 60.00) = GBP 1,080.00 • Structural checking: (2 hrs x GBP 60.00) = GBP 120.00 • Consultations: (0.5 hrs x GBP 60) = GBP 30.00 • Electronic/Internet drawings GBP 75.00 • Meetings: (3.75 hrs x GBP 60.00) = GBP 225.00 • Administrative: (0.5 hrs x GBP 60.00) = GBP 30.00 • Inspections petrol fee: (40 miles x GBP 3.60) = GBP 144.00 • Contingency: (5 hrs x GBP 60.00) = GBP 300.00 Total: GBP 2,964 3 Approved Inspector files the initial notice to the Local Authority 5 days no charge Agency : Local Authority Once the contract is signed and the terms of reference are outlined, the builder and the AI jointly notify the local authority of their intention to build -- also called an initial notice. This initial notice will inform the Local Council that the AI has been retained. Once this notice has been accepted by the local authority, the responsibility for plan checking and site inspection will be formally placed on the AI. The local council has 5 days to accept or reject the initial notice in writing (via email, fax or post). Acceptance is given by default if the local authority does not respond within the 5-day period. During that period of time, no work can be done. Once construction work commences, the AI would conduct at least 8 -- 9 inspections at various stages of construction and risk-based factors (for BuildCo’s case). Page 13 Doing Business 2019 United Kingdom 4 Apply for water and sewage connection 1 day GBP 485 Agency : Thames Water Utilities Ltd. A Water Fittings Table outlining the fittings due to be installed and a site location plan showing the point of entry to the property boundary for new supplies must be submitted with the form. In the application for a sewage connection, applicants need to provide plans detailing what connection is being made, and the type of sewer they are connecting to. Applicants may submit an application form (either online or by post) to the Thames Water Utilities Ltd. There is a £485 charge to connect to a public sewer by lateral drain. 5 Receive inspection from the water and sewage provider 1 day no charge Agency : Thames Water Utilities Ltd. Upon approval the engineer instructs Thames Water’s contractor to assess the physical work involved to make the connection. This includes a site survey, size of site gang/workforce, equipment and materials needed, plus any involvement with the local highway department as to whether there is any significant impact on the public road network. This element takes approximately 2-3 weeks. The contractor will then send their report to the engineer with the scope of work, survey and technical proposal. The engineer will prepare and authorize the quote and send it out to BuildCo within 5 days of receipt of the contractor’s report. 6 Submit application to local Fire and Rescue Authority and obtain approval 21 days no charge Agency : Fire and Rescue Authority Approved Inspector submits (via mail) the respective elements of the drawing and plans pertinent to fire safety to a local Fire Safety Office to ensure that the building is compliant with the latest fire safety legislation and that the appropriate fire and life safety systems are in place. By law, the Fire Safety Office must respond within 15 business days (21 calendar days) and send its comments and approval. This is done as part of plan approval process and is recorded as an independent procedure since AI interacts with a Fire Officer. Upon the completion of the building, BuildCo used to obtain a Fire Certificate from Fire Safety Office. However, the Fire Certificate is no longer required following the reforms in the Regulatory Reform (Fire Safety) Order 2005 (FSO 2005) which came into effect in October 2006, and replaced over 70 pieces of fire safety laws. The FSO applies to all non-domestic premises in England and Wales, including the common parts of blocks of flats and houses in multiple occupations (HMOs). The FSO 2005 is a tool for self-regulation of businesses for the fire risk of the premises. Under the FSO, the responsible person must carry out a fire safety risk assessment and implement and maintain a fire management plan. The companies have to carry out a risk assessment by completing a 5-step fire risk assessment survey online: (http://www.fire.gov.uk/Workplace+safety/WhatTheLawRequires/) According to this survey -- FSO 2005 the warehouse of BuildCo would be classified as medium risk object. Since there will be more than 5 people occupying/working in the building, BuildCo would need to file the copy of completed FSO 2005 to the local Fire Safety Office. BuildCo does not need to wait for the approval or any other consent before using the premises. This risk is with the building operators, as they are deemed liable for any problems. The Fire Safety Office may conduct an inspection under a risk-based scheme: whether there was a similar track record of companies with fire, or neighbors complain, etc. Small scale and standard objects would be seldom inspected. Also, given that this would be a new building it would be assumed by the Fire Safety Office that the latest techniques of fire safety prevention would have been considered during the planning process. 7 Obtain water and sewerage connection 20 days GBP 5,321 Agency : Thames Water Utilities Ltd. Page 14 Doing Business 2019 United Kingdom 8 Request and receive energy performance certificate from Accredited 1 day GBP 78 Energy Assessor Agency : Accredited Energy Assessor Following the nationwide implementation of the "Energy Performance of Buildings Directive" adopted, on December 16, 2002, as of October 1, 2008 all commercial buildings whenever built, rented or sold require an Energy Performance Certificate. The certificate records how energy effcient a property is as a building and provides A+ to G ratings. It is the responsibilty of the builder/constructor to give the Energy Performance Certificate to the Purchaser on physical completion of the building and notify the local authority Building Control officers or approved inspectors, who will not issue a Certificate of Completion until the issue of an EPC has occurred. They are produced using standard methods and assumptions about energy usage so that the energy effciency of one building can easily be compared with another building of the same type. This allows prospective buyers, tenants, owners, occupiers and purchases to see information on the energy effciency and carbon emissions from their building so they can consider energy effciency and fuel costs as part of their investment. An EPC always includes a recommendation report that lists cost effective and other measures (such as low and zero carbon generating systems) to improve the energy rating. A rating is also given showing what could be achieved if all the recommendations were implemented. The fee for producing an EPC is determined by the market and may vary between GBP 55.00 to GBP 100.00. 9 File completion certificate with the Local Building Control Department 1 day no charge Agency : Local Building Control Department Once the building is completed, BuildCo would notify AI about the completion. AI completes the final inspection within 24 hours and prepares the final certificate of completion. AI will send a copy of the final completion certificate to the Building Control Department of Local Authority and BuildCo within 5 days after completion of the final inspection. The Local Authority keeps the final completion certificate in a public register. There would be no local authority inspection. Takes place simultaneously with previous procedure. Page 15 Doing Business 2019 United Kingdom Details – Dealing with Construction Permits in United Kingdom – Measure of Quality Answer Score Building quality control index (0-15) 9.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly specified in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) engineer; Private firm. Quality control during construction index (0-3) 3.0 What types of inspections (if any) are required by law to be carried out during construction? Inspections by 2.0 (0-2) external engineer or firm; Risk- based inspections. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a final inspection required by law to verify that the building was built in accordance Yes, external 2.0 with the approved plans and regulations? (0-2) engineer submits report for final inspection. Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 0.0 Which parties (if any) are held liable by law for structural flaws or problems in the building No party is held 0.0 once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 0.0 structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law or Decennial Insurance)? (0-1) to obtain insurance . Professional certifications index (0-4) 0.0 What are the qualification requirements for the professional responsible for verifying that the Minimum number 0.0 architectural plans or drawings are in compliance with existing building regulations? (0-2) of years of experience; Being a registered architect or engineer. What are the qualification requirements for the professional who supervises the construction Being a 0.0 on the ground? (0-2) registered architect or engineer. Page 16 Doing Business 2019 United Kingdom Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions about the (number) warehouse, the electricity connection and the monthly consumption are used. • Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. • Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the data are receiving all necessary inspections also collected for the second largest business city. • Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is in an purchasing material for these works area with no physical constraints. For example, the property is not near a railway. - Is a new construction and is being connected to electricity for the first time. • Concluding any necessary supply contract and - Has two stories with a total surface area of approximately 1,300.6 square meters obtaining final supply (14,000 square feet). The plot of land on which it is built is 929 square meters Time required to complete each procedure (10,000 square feet). (calendar days) The electricity connection: • Is at least 1 calendar day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed • Each procedure starts on a separate day capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 • Does not include time spent gathering kilowatt (kW). information - Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more • Reflects the time spent in practice, with little common in the area where the warehouse is located and requires works that involve follow-up and no prior contact with officials the crossing of a 10-meter road (such as by excavation or overhead lines) but are all Cost required to complete each procedure (% of carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road. income per capita) - Does not require work to install the internal wiring of the warehouse. This has • Official costs only, no bribes already been completed up to and including the customer’s service panel or • Value added tax excluded switchboard and the meter base. The reliability of supply and transparency of The monthly consumption: tariffs index (0-8) - It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 • Duration and frequency of power outages (0–3) p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that • Tools to monitor power outages (0–1) there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh. • Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest • Regulatory monitoring of utilities’ performance supplier. (0–1) - Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation • Financial deterrents limiting outages (0–1) purposes only 30 days are used. • Transparency and accessibility of tariffs (0–1) Price of electricity (cents per kilowatt-hour)* • Price based on monthly bill for commercial warehouse in case study *Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor the ranking on the ease of getting electricity. Page 17 Doing Business 2019 United Kingdom Getting Electricity - United Kingdom Standardized Connection Price of electricity (US cents per kWh) 17.2 Name of utility UK Power Networks City Covered London Indicator United Kingdom OECD high Best Regulatory income Performance Procedures (number) 3 4.5 3 (25 Economies) Time (days) 50 77.2 18 (3 Economies) Cost (% of income per capita) 23.9 64.2 0.0 (3 Economies) Reliability of supply and transparency of tariff index (0-8) 8 7.5 8.0 (27 Economies) Figure – Getting Electricity in United Kingdom and comparator economies – Ranking and Score DB 2019 Getting Electricity Score 0 100 98.79: Germany (Rank: 5) 96.45: United Kingdom (Rank: 7) 92.01: France (Rank: 14) 85.47: Regional Average (OECD high income) 84.24: Ireland (Rank: 43) 82.15: United States (Rank: 54) Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity. Page 18 Doing Business 2019 United Kingdom Figure – Getting Electricity in United Kingdom – Procedure, Time and Cost Time (days) Cost (% of income per capita) 50 30 Cost (% of income per capita) 25 40 20 Time (days) 30 15 20 10 10 5 0 0 1 *2 3 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Figure – Getting Electricity in United Kingdom and comparator economies – Measure of Quality 8 8 8 8 8 7.5 7.2 7 6 Index score 5 4 3 2 1 0 United Kingdom France Germany Ireland United States OECD high income Page 19 Doing Business 2019 United Kingdom Details – Getting Electricity in United Kingdom – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Submit application to UK Power Networks and await and accept estimate 20 calendar days GBP 0 Agency : UK Power Networks The application can be submitted online, in person or by mail. The connection requestor has to attach with the application: completed application form and site drawings. At this stage the applicant can choose either UK Power Networks or an Independent Connection Provider to design the network extension while only UK Power Networks can design the point of connection and any upstream reinforcement works. The connection may also be provided by an Independent Distribution Network Operator (IDNO). With this option the IDNO would continue to own and operate the distribution system assets installed. The majority of the clients customers choose UK Power Networks to complete all parts of the connection for this type of project. A budget estimate and connection offer is issued free of charge. 2 Sign supply contract with supplier 1 calendar day GBP 0 Agency : Supplier The customer will contact its chosen supplier to enter into a supply contract. The customer will advise the supplier of the supply number and the date by which the connection will be provided (as advised by the distributor). This will take place in a single customer transaction over the telephone or on line and within 1 day. 3 Receive external connection works, meter installation and electricity flow 30 calendar days GBP 7,256.9 Agency : UK Power Networks/Supplier The external works are performed by UK Power Networks. The utility obtains the excavation permit at the local authority or the Highways Agency. The metering industry in the UK is an open competitive market, and the applicant can choose their own Meter Operator or can choose to use the Meter Operator services provided by the electricity supplier. The electricity supplier normally appoints the meter operator. The meter is installed before the supply of electricity can be provided. The electricity starts flowing on the same day the external connection works are finished providing the supplier has sufficient notice. Takes place simultaneously with previous procedure. Page 20 Doing Business 2019 United Kingdom Details – Getting Electricity in United Kingdom – Measure of Quality Answer Reliability of supply and transparency of tariff index (0-8) 8 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.3 System average interruption frequency index (SAIFI) 0.1 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of Yes supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages Yes exceed a certain cap? Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online www.switchmybusine ss.com Are customers notified of a change in tariff ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Page 21 Doing Business 2019 United Kingdom Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on To make the data comparable across economies, several assumptions about the immovable property (number) parties to the transaction, the property and the procedures are used. • Preregistration procedures (for example, The parties (buyer and seller): checking for liens, notarizing sales agreement, paying property transfer taxes) - Are limited liability companies (or the legal equivalent). - Are located in the periurban area of the economy’s largest business city. For 11 • Registration procedures in the economy's largest economies the data are also collected for the second largest business city. business city. - Are 100% domestically and privately owned. • Postregistration procedures (for example, filling - Have 50 employees each, all of whom are nationals. title with municipality) - Perform general commercial activities. Time required to complete each procedure The property (fully owned by the seller): (calendar days) - Has a value of 50 times income per capita, which equals the sale price. • Does not include time spent gathering - Is fully owned by the seller. information - Has no mortgages attached and has been under the same ownership for the past • Each procedure starts on a separate day - 10 years. though procedures that can be fully completed - Is registered in the land registry or cadastre, or both, and is free of title disputes. online are an exception to this rule - Is located in a periurban commercial zone, and no rezoning is required. - Consists of land and a building. The land area is 557.4 square meters (6,000 • Procedure is considered completed once final square feet). A two-story warehouse of 929 square meters (10,000 square feet) is document is received located on the land. The warehouse is 10 years old, is in good condition, has no • No prior contact with officials heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its Cost required to complete each procedure (% of entirety. property value) - Will not be subject to renovations or additional construction following the purchase. - Has no trees, natural water sources, natural reserves or historical monuments of • Official costs only (such as administrative fees, duties and taxes). any kind. - Will not be used for special purposes, and no special permits, such as for • Value Added Tax, Capital Gains Tax and illicit residential use, industrial plants, waste storage or certain types of agricultural payments are excluded activities, are required. - Has no occupants, and no other party holds a legal interest in it. Quality of land administration index (0-30) • Reliability of infrastructure index (0-8) • Transparency of information index (0–6) • Geographic coverage index (0–8) • Land dispute resolution index (0–8) • Equal access to property rights index (-2–0) Page 22 Doing Business 2019 United Kingdom Registering Property - United Kingdom Indicator United Kingdom OECD high Best Regulatory income Performance Procedures (number) 6 4.7 1 (4 Economies) Time (days) 21.5 20.1 1 (New Zealand) Cost (% of property value) 4.8 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 25.5 23.0 None in 2017/18 Figure – Registering Property in United Kingdom and comparator economies – Ranking and Score DB 2019 Registering Property Score 0 100 77.17: Regional Average (OECD high income) 76.87: United States (Rank: 38) 75.34: United Kingdom (Rank: 42) 69.63: Ireland (Rank: 64) 65.70: Germany (Rank: 78) 63.33: France (Rank: 96) Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators. Figure – Registering Property in United Kingdom – Procedure, Time and Cost Time (days) Cost (% of property value) 4.5 20 4 Cost (% of property value) 3.5 15 3 Time (days) 2.5 10 2 1.5 5 1 0.5 0 0 1 *2 3 *4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 23 Doing Business 2019 United Kingdom Figure – Registering Property in United Kingdom and comparator economies – Measure of Quality 30 25.5 25 24.0 23.0 22.0 21.0 Index score 20 17.6 15 10 5 0 United Kingdom France Germany Ireland United States OECD high income Details – Registering Property in United Kingdom – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Standard enquiries of the seller delivered to the buyer's solicitor with a title 19 days GBP 6,750; (GBP pack 3,500 - GBP 10,000) Agency : Solicitors of the parties Commercial Property Standard Enquiries (CPSE) are used by solicitors to find out details that cannot be inferred from the searches, eg. who is in actual occupation, how long the property has been used for its present use. Most solicitors use the commercial property standard enquiries prepared by members of the London Property Support Lawyers Group and endorsed by the British Property Federation. Depending on the enquiries raised, the seller's solicitor would typically spend 1-3 billable hours to prepare the enquiries taking his client's instructions. It would probably take the buyer's solicitor 30 minutes to 1 hour to review the replies. If there was no particular urgency, this part of the process would typically be started at the same time as the searches are requested, and would be completed in around 1 week after the results of all the searches are received. 2 Conduct searches on the property 14 days GBP 650; (GBP 300 Agency : Search portal to GBP 1000) The buyer's solicitor will review the registered title to the property. It is the responsibility of the buyer's conveyancer to confirm to the buyer that it will be acquiring good and marketable title to the property. As part of the due diligence to determine whether the title is good and marketable, the purchaser's solicitor will conduct the following searches: 1. Investigation of the title: to know whether the land is registered at HM Land Registry and know what interests affect this land and if there are any limitations. If the land is unregistered, the solicitor would have to look at the deeds and correspondence between the persons that appear on those deeds. This will be decreasingly the case as registration is now compulsory. 2. Conveyancing searches, which would include: • Local Authority Search • Planning history (eg. permissions) • Desktop environmental search (to determine any environmental issues, such as flooding or contamination) • Public highway search • Chancel repair liability search (in this case the solicitor does not search the property itself, but the area in which the property is. If the area turns out to be affected by the liability to contribute to chancel repairs, then the property has to be insured against any future chancel repair claims. The amount of the insurance depends on the value of the property) • Other searches depending on the area, eg. coal mine shaft search or underground search (these issues affect the value of the property) 3. Seller company search: to see the articles of association and what powers the representatives have For a property in London, solicitors usually request most of these searches through a search portal. These search portals are the one stop shop for most searches, and solicitors need a user name to access them. The search portals will pass on to the solicitor the information that they acquire from the relevant authorities. In total, these searches are usually 300 to 1000 pounds, depending on the number of searches requested, the amount that each local authority charges, and whether the solicitor requests the standard searches or is adding additional questions, which increase the cost. The results of the searches take from one day to 2-3 weeks to come back, depending on the search. The local authority search is the lengthiest one. Once satisfied with the results of the searches, the information provided in the standard inquiries and the title pack, the buyer's solicitor will prepare a report for the buyer on the title and other matters affecting the property. Page 24 Doing Business 2019 United Kingdom 3 Drafting of contracts and exchange of contracts once agreed 1 day included in Procedure Agency : Lawyer's office 1 Property transactions are conducted by licensed conveyancers or solicitors. However, in the case of commercial properties, these transactions are usually conducted by solicitors. The seller's solicitor will prepare a draft of the contract and submit it to the purchaser's solicitor once approved by his/her client. The purchaser's solicitor will review the draft and suggest any suitable amendments. Once the two parties agree on the contract, contracts are exchanged. The solicitors acting for the buyer and seller can meet to exchange contracts, but that is rare. The exchange is usually done over the telephone in accordance with a specific formula for exchanging contracts over the phone. The most common is formula B where each solicitor holds a 'part' contract signed by his client. The solicitors agree over the phone specific terms of the contract (e.g., the amount of the deposit, completion date, etc.) and record the time of exchange and other details. Each solicitor sends their client's part contract to the other solicitor in the post that day. The buyer's solicitor will also send a check for the deposit (usually 10% of the purchase price). 4 Pre-completion search with priority requested at the Land Registry Less than one day, GBP 3; (GBP 3 if Agency : HM Land Registry online lodged electronically; The buyer's solicitor raises pre-completion inquiries of the seller's solicitor known GBP 7 if lodged in as 'requisitions on title' and a 'pre-completion search with priority' in order to paper) block any movements on the property until completion of the property transfer. 5 Complete and lodge a Land Transaction Return and pay the Stamp Duty Less than one day, GBP 65,408.68; (Up Land Tax (SDLT) (available on-line) online to GBP 150,000: 0% Agency : HM Revenue & Customs GBP 150,001 to GBP The buyer's solicitor would usually prepare the Land Transaction Return for the 250,000: 2% approval of the buyer (as SDLT is a self-assessment tax) prior to completion. For GBP 250,001+: 5% every land transaction the purchaser must complete, sign and send the land And GBP 13.) transaction return to be received by HM Revenue & Customs before the end of 30 days following the effective date of the transaction. The return includes a self- assessment of the stamp duty land tax chargeable on the transaction returned. The completed Land Transaction Return must be sent by post to the Revenue's Rapid Data Capture center in Netherton (near Liverpool) or submitted electronically. When the Return is submitted, the correct amount of SDLT must also be paid either by cheque, through the CHAPS automated payment system or via direct bank transfer. Once the Return has been processed by the Revenue the Revenue will issue a Land Transaction Return Certificate. If the Return has been submitted electronically, the Certificate is typically received within two hours. If the Return has been submitted in the post, the Certificate is typically received within one month. The issue of a Land Transaction Return Certificate merely evidences that a Return has been filed at the Revenue; issuance of a Certificate does not necessarily mean that the information contained within the Return and/or amount of SDLT paid is correct. The Certificate must be sent to HM Land Registry when an application for registration of the transfer is made. Page 25 Doing Business 2019 United Kingdom 6 The transfer and any legal charges are registered at the Land Registry Less than one day, GBP 455 Agency : HM Land Registry online The buyer's solicitor drafts a Transfer Deed and sends it to the seller's solicitor for approval. Once approved, it is signed by the parties. The Transfer deed makes the transfer of the property to the buyer effective on completion. Parties register the transfer deed (and any legal charges) at the Land Registry by submitting the appropriate documents and paying the Land Registry's fees. A check made payable to "Land Registry" must accompany the application for registration to the correct office of the Land Registry (unless there was a prior authorized agreement with the Registry to pay by direct debit) On completion of the registration the Land Registry will send to the buyer's solicitor a title information document. The documentation shall include: - Completed Land Registry form AP1 - Original and certified copy of transfer deed - Land transaction certificate - Original and certified copy mortgage if the buyer acquires the property with financing The law requires conveyancers, from 10 November 2008, when they submit an application to register the interest of their client in a property, to provide details of the conveyancers who acted for all other parties involved in the transaction. If any involved person (including a company) is not represented by a conveyancer, the person lodging the application must either confirm that they are satisfied that sufficient steps have been taken to verify the identity of the unrepresented person or otherwise lodge evidence of the unrepresented person's identity. If confirmation of identity is required for an application, but is not provided, the Land Registry will reject the application. Identification requirements extend to buyers, sellers, landlords, tenants, borrowers and lenders. A charge by a company must be registered with the Companies Registry within 21 days of its creation, failing which the charge is void against a liquidator or another creditor of the company. Land registry information available at www.landregistry.gov.uk. Takes place simultaneously with previous procedure. Page 26 Doing Business 2019 United Kingdom Details – Registering Property in United Kingdom – Measure of Quality Answer Score Reliability of infrastructure index (0-8) 8.0 What is the institution in charge of immovable property registration? Her Majesty's Land Registry In what format are the majority of title or deed records kept in the largest business city—in a Computer/Fully 2.0 paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for checking for encumbrances (liens, mortgages, restrictions Yes 1.0 and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Her Majesty's Land Registry In what format are the majority of maps of land plots kept in the largest business city—in a Computer/Fully 2.0 paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the cadastral Different 1.0 or mapping agency kept in a single database, in different but linked databases or in separate databases but databases? linked Do the immovable property registration agency and cadastral or mapping agency use the Yes 1.0 same identification number for properties? Transparency of information index (0–6) 5.5 Who is able to obtain information on land ownership at the agency in charge of immovable Anyone who 1.0 property registration in the largest business city? pays the official fee Is the list of documents that are required to complete any type of property transaction made Yes, online 0.5 publicly available–and if so, how? Link for online access: https://www.gov.u k/government/coll ections/land- registry- forms#land- registration-forms Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available–and if so, how? Link for online access: https://www.gov.u k/government/coll ections/fees- land-registry- guides Does the agency in charge of immovable property registration commit to delivering a legally Yes, online 0.5 binding document that proves property ownership within a specific time frame–and if so, how does it communicate the service standard? Link for online access: Is there a specific and separate mechanism for filing complaints about a problem that Yes 1.0 occurred at the agency in charge of immovable property registration? Contact information: https://www.gov.u k/government/org anisations/land- registry/about/co mplaints- procedure Are there publicly available official statistics tracking the number of transactions at the Yes 0.5 immovable property registration agency? Page 27 Doing Business 2019 United Kingdom Number of property transfers in the largest business city in 2017: 69,510 transfers and 92,841 first leases Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the official fee Is the applicable fee schedule for accessing maps of land plots made publicly available— Yes, online 0.5 and if so, how? Link for online access: https://www.gov.u k/government/coll ections/fees- land-registry- guides Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 specific time frame—and if so, how does it communicate the service standard? Link for online access: Is there a specific and separate mechanism for filing complaints about a problem that Yes 0.5 occurred at the cadastral or mapping agency? Contact information: https://www.gov.u k/government/org anisations/land- registry/about/co mplaints- procedure Geographic coverage index (0–8) 4.0 Are all privately held land plots in the economy formally registered at the immovable property No 0.0 registry? Are all privately held land plots in the largest business city formally registered at the No 0.0 immovable property registry? Are all privately held land plots in the economy mapped? Yes 2.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 8.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Is there a specific compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a property Yes 0.5 transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Lawyer; Does the legal system require verification of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Lawyer; Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a property Land Registration worth 50 times gross national income (GNI) per capita and located in the largest business division of the city, what court would be in charge of the case in the first instance? Property Chamber, First- tier Tribunal How long does it take on average to obtain a decision from the first-instance court for such a Less than a year 3.0 case (without appeal)? Are there any statistics on the number of land disputes in the first instance? Yes 0.5 Page 28 Doing Business 2019 United Kingdom Number of land disputes in the largest business city in 2017: 1154.0 Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes Do married men and married women have equal ownership rights to property? Yes 0.0 Page 29 Doing Business 2019 United Kingdom Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of • Rights of borrowers and lenders through indicators. The depth of credit information index measures rules and practices collateral laws (0-10) affecting the coverage, scope and accessibility of credit information available • Protection of secured creditors’ rights through through a credit registry or a credit bureau. The strength of legal rights index bankruptcy laws (0-2) measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first Depth of credit information index (0–8) determined whether a unitary secured transactions system exists. Then two case • Scope and accessibility of credit information scenarios, case A and case B, are used to determine how a nonpossessory security distributed by credit bureaus and credit registries interest is created, publicized and enforced according to the law. Special emphasis (0-8) is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a Credit bureau coverage (% of adults) secured lender, BizBank. • Number of individuals and firms listed in largest In some economies the legal framework for secured transactions will allow only case credit bureau as a percentage of adult population A or case B (not both) to apply. Both cases examine the same set of legal provisions Credit registry coverage (% of adults) relating to the use of movable collateral. • Number of individuals and firms listed in credit Several assumptions about the secured borrower (ABC) and lender (BizBank) registry as a percentage of adult population are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Page 30 Doing Business 2019 United Kingdom Getting Credit - United Kingdom Indicator United Kingdom OECD high Best Regulatory income Performance Strength of legal rights index (0-12) 7 6.1 12 (5 Economies) Depth of credit information index (0-8) 8 6.7 8 (42 Economies) Credit registry coverage (% of adults) 0 21.8 100.0 (4 Economies) Credit bureau coverage (% of adults) 100 65.3 100.0 (25 Economies) Figure – Getting Credit in United Kingdom and comparator economies – Ranking and Score DB 2019 Getting Credit Score 0 100 95.00: United States (Rank: 3) 75.00: United Kingdom (Rank: 32) 70.00: Germany (Rank: 44) 70.00: Ireland (Rank: 44) 64.12: Regional Average (OECD high income) 50.00: France (Rank: 99) Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in United Kingdom and comparator economies 11 8 7 7 7 6 6.1 6 Index Score 5 4 4 3 2 1 0 United Kingdom France Germany Ireland United States OECD high income Page 31 Doing Business 2019 United Kingdom Details – Legal Rights in United Kingdom Strength of legal rights index (0-12) 7 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a Yes specific description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and Yes replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be Yes secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by No asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed No online by any interested third party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization No procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow Yes the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in United Kingdom and comparator economies 8 8 8 8 7 7 6.7 6 6 Index Score 5 4 3 2 1 0 United Kingdom France Germany Ireland United States OECD high income Page 32 Doing Business 2019 United Kingdom Details – Credit Information in United Kingdom Depth of credit information index (0-8) Credit Credit Score bureau registry Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and Yes No 1 financial institutions - distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries Yes No 1 that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or Yes No 1 credit registry? Can banks and financial institutions access borrowers’ credit information online Yes No 1 (for example, through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help Yes No 1 banks and financial institutions assess the creditworthiness of borrowers? Total Score ("yes" to either public bureau or private registry) 8 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 82,886,947 0 Number of firms 29,330,000 0 Total 112,216,947 0 Percentage of adult population 100 0 Page 33 Doing Business 2019 United Kingdom Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions • Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related- party transactions The business (Buyer): • Extent of director liability index (0–10): Ability - Is a publicly traded corporation listed on the economy’s most important stock of minority shareholders to sue and hold exchange. If there are fewer than ten listed companies or if there is no stock interested directors liable for prejudicial related- exchange in the economy, it is assumed that Buyer is a large private company with party transactions; Available legal remedies multiple shareholders. (damages, disgorgement of profits, fines, - Has a board of directors and a chief executive officer (CEO) who may legally act on imprisonment, rescission of the transaction) behalf of Buyer where permitted, even if this is not specifically required by law. • Ease of shareholder suits index (0–10): - Has a supervisory board in economies with a two-tier board system on which Mr. Access to internal corporate documents; James appointed 60% of the shareholder-elected members. Evidence obtainable during trial and allocation of - Has not adopted bylaws or articles of association that go beyond the minimum legal expenses requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory. • Extent of conflict of interest regulation index - Is a manufacturing company with its own distribution network. (0–10): Simple average of the extent of disclosure, extent of director liability and ease of The transaction involves the following details: shareholder indices - Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two • Extent of shareholder rights index (0-10): directors to Buyer’s five-member board. Shareholders’ rights and role in major corporate - Mr. James also owns 90% of Seller, a company that operates a chain of retail decisions hardware stores. Seller recently closed a large number of its stores. • Extent of ownership and control index (0-10): - Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Governance safeguards protecting shareholders Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price from undue board control and entrenchment is equal to 10% of Buyer’s assets and is higher than the market value. - The proposed transaction is part of the company’s principal activity and is not • Extent of corporate transparency index (0-10): outside the authority of the company. Corporate transparency on ownership stakes, - Buyer enters into the transaction. All required approvals are obtained, and all compensation, audits and financial prospects required disclosures made—that is, the transaction was not entered into fraudulently. • Extent of shareholder governance index (0– - The transaction causes damages to Buyer. Shareholders sue Mr. James and the 10): Simple average of the extent of shareholders executives and directors that approved the transaction. rights, extent of ownership and control and extent of corporate transparency indices • Strength of minority investor protection index (0–10): Simple average of the extent of conflict of interest regulation and extent of shareholder governance indices Page 34 Doing Business 2019 United Kingdom Protecting Minority Investors - United Kingdom Indicator United Kingdom OECD high Best Regulatory income Performance Extent of disclosure index (0-10) 10.0 6.5 10 (13 Economies) Extent of director liability index (0-10) 7.0 5.3 10 (Cambodia) Ease of shareholder suits index (0-10) 8.0 7.3 10 (Djibouti) Extent of shareholder rights index (0-10) 7.0 6.4 10 (Kazakhstan) Extent of ownership and control index (0-10) 5.0 5.4 None in 2017/18 Extent of corporate transparency index (0-10) 8.0 7.6 10 (6 Economies) Figure – Protecting Minority Investors in United Kingdom and comparator economies – Ranking and Score DB 2019 Protecting Minority Investors Score 0 100 75.00: United Kingdom (Rank: 15) 75.00: Ireland (Rank: 15) 66.67: France (Rank: 38) 64.67: United States (Rank: 50) 64.21: Regional Average (OECD high income) 58.33: Germany (Rank: 72) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in United Kingdom and comparator economies – Measure of Quality the United Kingdom 8 7 10 5 7 8 France 10 3 8 8 5 6 Germany 7 5 5 6 7 5 Ireland 8 8 9 4 7 9 United States 5.4 8.6 7.4 4.4 4 9 OECD high income 7.4 5.5 6.5 5.2 6.3 7.4 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0-10) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-10) Extent of shareholder rights index (0-10) Ease of shareholder suits index (0-10) Page 35 Doing Business 2019 United Kingdom Details – Protecting Minority Investors in United Kingdom – Measure of Quality Answer Score Extent of conflict of interest regulation index (0-10) 8.3 Extent of disclosure index (0-10) 10.0 Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3) Shareholders 3.0 excluding interested parties Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0 Must Mr. James disclose his conflict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) Disclosure on the 2.0 transaction and on the conflict of interest Must Buyer immediately disclose the transaction to the public? (0-2) Disclosure on the 2.0 transaction and on the conflict of interest Extent of director liability index (0-10) 7.0 Can shareholders representing 10% of Buyer's share capital sue for the damage the Yes 1.0 transaction caused to Buyer? (0-1) Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0- Liable if unfair or 2.0 2) prejudicial Can shareholders hold the other directors liable for the damage the transaction caused to Liable if negligent 1.0 Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay profits made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disqualified upon a successful claim by shareholders? (0-1) No 0.0 Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if 1.0 negligently concluded Ease of shareholder suits index (0-10) 8.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 2.0 directly prove specific facts in the plaintiff’s claim Can the plaintiff request categories of documents from the defendant without identifying Yes 1.0 specific ones? (0-1) Can the plaintiff directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plaintiffs recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 6.7 Extent of shareholder rights index (0-10) 7.0 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Page 36 Doing Business 2019 United Kingdom Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the affected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all or almost all members consent to add a No 0.0 new member? Assuming that Buyer is a limited company, must a member first offer to sell their interest to No 0.0 the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 5.0 Is it forbidden to appoint the same individual as CEO and chairperson of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the end Yes 1.0 of their term? Must the board of directors include a separate audit committee exclusively comprising board Yes 1.0 members? Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Yes 1.0 Buyer? Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender offer to No 0.0 all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute profits within a maximum No 0.0 period set by law? Extent of corporate transparency index (0-10) 8.0 Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general meeting Yes 1.0 agenda? Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? No 0.0 Assuming that Buyer is a limited company, can members representing 5% put items on the Yes 1.0 meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual financial statements be Yes 1.0 audited by an external auditor? Page 37 Doing Business 2019 United Kingdom Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2018 covering for the Paying Taxes indicator calendar year 2017 (January 1, 2017 – December 31, 2017). See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory contributions a 2017 (number per year adjusted for electronic medium size company must pay in a year, and measures the administrative burden and joint filing and payment) of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax • Total number of taxes and contributions paid or laws, time taken to comply with the requirements of postfiling processes and time withheld, including consumption taxes (value waiting. added tax, sales tax or goods and service tax) • Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: - TaxpayerCo is a medium-size business that started operations on January 1, 2016. Time required to comply with 3 major taxes It produces ceramic flowerpots and sells them at retail. All taxes and contributions (hours per year) recorded are paid in the second year of operation (calendar year 2017). Taxes and • Collecting information, computing tax payable mandatory contributions are measured at all levels of government. • Preparing separate tax accounting books, if The VAT refund process: required - In June 2017, TaxpayerCo. makes a large capital purchase: the value of the • Completing tax return, filing with agencies machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are • Arranging payment or withholding equally expensed per month (875 times income per capita divided by 12). The Total tax and contribution rate (% of commercial machinery seller is registered for VAT and excess input VAT incurred in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, profits) sales and the machine and the tax reporting period is every month. Input VAT will • Profit or corporate income tax exceed Output VAT in June 2017. • Social contributions, labor taxes paid by The corporate income tax audit process: employer - An error in calculation of income tax liability (for example, use of incorrect tax • Property and property transfer taxes depreciation rates, or incorrectly treating an expense as tax deductible) leads to an • Dividend, capital gains, financial transactions incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. taxes discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability • Waste collection, vehicle, road and other taxes due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period. Postfiling Index • Time to comply with a VAT refund (hours) • Time to obtain a VAT refund (weeks) • Time to comply with a corporate income tax correction (hours) • Time to complete a corporate income tax correction (weeks) Page 38 Doing Business 2019 United Kingdom Paying Taxes - United Kingdom Indicator United Kingdom OECD high Best Regulatory income Performance Payments (number per year) 8 11.2 3 (Hong Kong SAR, China) Time (hours per year) 105 159.4 49 (Singapore) Total tax and contribution rate (% of profit) 30.0 39.8 26.1% (32 Economies) Postfiling index (0-100) 71.00 84.41 None in 2017/18 Figure – Paying Taxes in United Kingdom and comparator economies – Ranking and Score DB 2019 Paying Taxes Score 0 100 94.46: Ireland (Rank: 4) 87.14: United Kingdom (Rank: 23) 84.14: United States (Rank: 37) 83.32: Regional Average (OECD high income) 82.11: Germany (Rank: 43) 79.31: France (Rank: 55) Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in United Kingdom and comparator economies – Measure of Quality 97.67 100 92.40 92.93 94.04 84.41 80 71.00 Index score 60 40 20 0 United Kingdom France Germany Ireland United States OECD high income Page 39 Doing Business 2019 United Kingdom Details – Paying Taxes in United Kingdom Tax or Payments Notes on Time Statutory Tax base Total tax Notes on mandatory (number) Payments (hours) tax rate and TTCR contribution contribution rate (% of profit) Corporate 1.0 online 32.0 19% taxable profit 17.26 income tax Labor tax 1.0 online 48.0 13.8% (floor gross salaries 10.85 of GBP 157 per week) Municipal 1.0 various property 1.45 business tax value Tax on 1.0 10% insurance 0.21 insurance premium contracts Environmenta 1.0 GBP 85.68 weight of 0.14 l tax per tonne active waste Vehicle tax 1.0 various depending on 0.09 weight and size of vehicle Fuel Tax 1.0 included in 0.00 fuel price Labor tax 0.0 various rates gross salaries 0.00 paid by the employees Sales tax 1.0 online 25.0 20% value added 0.00 not included Totals 8 105 30.0 Page 40 Doing Business 2019 United Kingdom Details – Paying Taxes in United Kingdom – Tax by Type Taxes by type Answer Profit tax (% of profit) 17.3 Labor tax and contributions (% of profit) 10.8 Other taxes (% of profit) 1.9 Page 41 Doing Business 2019 United Kingdom Details – Paying Taxes in United Kingdom – Measure of Quality Answer Score Postfiling index (0-100) 71.00 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process None Percentage of cases exposed to a VAT audit (%) 0% - 24% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 0.0 100 Time to obtain a VAT refund (weeks) 7.2 92.25 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 50% - 74% Time to comply with a corporate income tax correction (hours) 6.0 91.74 Time to complete a corporate income tax correction (weeks) 34.0 0 Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 42 Doing Business 2019 United Kingdom Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: • Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are or border handling in origin economy recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are • Obtaining, preparing and submitting documents recorded as is. Alternatively, suppose documents are submitted to a customs agency required by destination economy and any transit at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. economies The time for customs clearance would be recorded as 24 hours because the actual • Covers all documents required by law and in procedure took 24 hours. practice, including electronic submissions of Cost: Insurance cost and informal payments for which no receipt is issued are information excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors Border compliance are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector • Customs clearance and inspections experts in international trade logistics and are informed about exchange rates. • Inspections by other agencies (if applied to more than 20% of shipments) Assumptions of the case study: - For all 190 economies covered by Doing Business, it is assumed a shipment is in a • Handling and inspections that take place at the warehouse in the largest business city of the exporting economy and travels to a economy’s port or border warehouse in the largest business city of the importing economy. - It is assumed each economy imports 15 metric tons of containerized auto parts (HS Domestic transport 8708) from its natural import partner—the economy from which it imports the largest • Loading or unloading of the shipment at the value (price times quantity) of auto parts. It is assumed each economy exports the warehouse or port/border product of its comparative advantage (defined by the largest export value) to its • Transport between warehouse and port/border natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. • Traffic delays and road police checks while - The mode of transport is the one most widely used for the chosen export or import shipment is en route product and the trading partner, as is the seaport or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 43 Doing Business 2019 United Kingdom Trading across Borders - United Kingdom Indicator United Kingdom OECD high Best Regulatory income Performance Time to export: Border compliance (hours) 24 12.5 1 (19 Economies) Cost to export: Border compliance (USD) 280 139.1 0 (19 Economies) Time to export: Documentary compliance (hours) 4 2.4 1 (26 Economies) Cost to export: Documentary compliance (USD) 25 35.2 0 (20 Economies) Time to import: Border compliance (hours) 3 8.5 0 (25 Economies) Cost to import: Border compliance (USD) 0 100.2 0 (28 Economies) Time to import: Documentary compliance (hours) 2 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 0 24.9 0 (30 Economies) Figure – Trading across Borders in United Kingdom and comparator economies – Ranking and Score DB 2019 Trading Across Borders Score 0 100 94.21: Regional Average (OECD high income) 93.76: United Kingdom (Rank: 30) 92.01: United States (Rank: 36) 91.77: Germany (Rank: 40) 87.25: Ireland (Rank: 52) 100.00: France (Rank: 1) Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import. Figure – Trading across Borders in United Kingdom – Time and Cost Time (hours) Cost (USD) 30 280 300 25 24 250 Time (hours) Cost (USD) 20 200 15 150 10 100 5 4 3 50 25 2 0 0 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 44 Doing Business 2019 United Kingdom Details – Trading across Borders in United Kingdom Characteristics Export Import Product HS 84 : Nuclear reactors, boilers, HS 8708: Parts and accessories of motor machinery and mechanical appliances; vehicles parts thereof Trade partner United States Germany Border Southampton port Dover port Distance (km) 130 130 Domestic transport time (hours) 5 5 Domestic transport cost (USD) 500 500 Details – Trading across Borders in United Kingdom – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required 1.3 75.0 by customs authorities Export: Clearance and inspections required 0.0 0.0 by agencies other than customs Export: Port or border handling 24.0 205.0 Import: Clearance and inspections required 0.7 0.0 by customs authorities Import: Clearance and inspections required 0.0 0.0 by agencies other than customs Import: Port or border handling 3.0 0.0 Page 45 Doing Business 2019 United Kingdom Details – Trading across Borders in United Kingdom – Trade Documents Export Import Bill of lading Bill of lading Commercial invoice Commercial invoice Packing list Packing list Customs Export Declaration Intrastat SOLAS certificate SOLAS certificate Page 46 Doing Business 2019 United Kingdom Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract between 2 courts (calendar days) domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt • Time to file and serve the case enforcement. • Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses several • Time to enforce the judgment assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller and courts (% of claim) Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. • Attorney fees - The buyer orders custom-made goods, then fails to pay alleging that the goods are • Court fees not of adequate quality. - The value of the dispute is 200% of the income per capita or the equivalent in local • Enforcement fees currency of USD 5,000, whichever is greater. - The seller sues the buyer before the court with jurisdiction over commercial cases Quality of judicial processes index (0-18) worth 200% of income per capita or $5,000. • Court structure and proceedings (-1-5) - The seller requests the pretrial attachment of the defendant’s movable assets to secure the claim. • Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. • Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. • Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Page 47 Doing Business 2019 United Kingdom Enforcing Contracts - United Kingdom Standardized Case Claim value GBP 58,397 Court name County Court of England and Wales City Covered London Indicator United Kingdom OECD high Best Regulatory income Performance Time (days) 437 582.4 None in 2017/18 Cost (% of claim value) 45.7 21.2 None in 2017/18 Quality of judicial processes index (0-18) 15.0 11.5 None in 2017/18 Figure – Enforcing Contracts in United Kingdom and comparator economies – Ranking and Score DB 2019 Enforcing Contracts Score 0 100 74.89: France (Rank: 12) 72.61: United States (Rank: 16) 70.39: Germany (Rank: 26) 68.69: United Kingdom (Rank: 32) 67.65: Regional Average (OECD high income) 56.03: Ireland (Rank: 102) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. Figure – Enforcing Contracts in United Kingdom – Time and Cost Time (days) Cost (% of claim value) 700 650 45.7 50 Cost (% of claim value) 600 582.4 499 40 500 Time (days) 437 420 30.5 395 26.9 30 400 21.2 300 17.4 20 14.4 200 10 100 0 0 France Germany Ireland OECD United United high Kingdom States income Page 48 Doing Business 2019 United Kingdom Figure – Enforcing Contracts in United Kingdom and comparator economies – Measure of Quality the United Kingdom 2 5 3.5 4.5 France 2.5 3 2 4.5 Germany 3 1.5 1.5 4.5 Ireland 2.5 0 0.5 4.5 United States 2.5 4.7 2.2 4.4 OECD high income 2.5 3.1 2.3 3.6 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5) Details – Enforcing Contracts in United Kingdom Indicator Time (days) 437 Filing and service 30 Trial and judgment 345 Enforcement of judgment 62 Cost (% of claim value) 45.7 Attorney fees 35 Court fees 9.5 Enforcement fees 1.2 Quality of judicial processes index (0-18) 15.0 Court structure and proceedings (-1-5) 4.5 Case management (0-6) 5.0 Court automation (0-4) 3.5 Alternative dispute resolution (0-3) 2.0 Page 49 Doing Business 2019 United Kingdom Details – Enforcing Contracts in United Kingdom – Measure of Quality Answer Score Quality of judicial processes index (0-18) 15.0 Court structure and proceedings (-1-5) 4.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 5.0 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil Yes case? 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) time to Yes 1.0 disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court for Yes 1.0 use by judges? 6. Are there any electronic case management tools in place within the competent court for Yes 1.0 use by lawyers? Court automation (0-4) 3.5 1. Can the initial complaint be filed electronically through a dedicated platform within the yes 1.0 competent court? 2. Is it possible to carry out service of process electronically for claims filed before the Yes 1.0 competent court? 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 0.5 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in official gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.0 1. Arbitration 1.5 Page 50 Doing Business 2019 United Kingdom 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 0.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or No consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there financial incentives for parties to attempt mediation or conciliation No (i.e., if mediation or conciliation is successful, a refund of court filing fees, income tax credits or the like)? Page 51 Doing Business 2019 United Kingdom Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used: • Measured in calendar years • Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties. Cost required to recover debt (% of debtor’s - The value of the hotel is 100% of the income per capita or the equivalent in local estate) currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s • Measured as percentage of estate value real estate. The hotel cannot pay back the loan, but makes enough money to • Court fees operate otherwise. • Fees of insolvency administrators In addition, Doing Business evaluates the quality of legal framework applicable to • Lawyers’ fees judicial liquidation and reorganization proceedings and the extent to which best • Assessors’ and auctioneers’ fees insolvency practices have been implemented in each economy covered. • Other related fees Outcome • Whether business continues operating as a going concern or business assets are sold piecemeal Recovery rate for creditors • Measures the cents on the dollar recovered by secured creditors • Outcome for the business (survival or not) determines the maximum value that can be recovered • Official costs of the insolvency proceedings are deducted • Depreciation of furniture is taken into account • Present value of debt recovered Strength of insolvency framework index (0- 16) • Sum of the scores of four component indices: • Commencement of proceedings index (0-3) • Management of debtor’s assets index (0-6) • Reorganization proceedings index (0-3) • Creditor participation index (0-4) Page 52 Doing Business 2019 United Kingdom Resolving Insolvency - United Kingdom Indicator United Kingdom OECD high Best Regulatory income Performance Recovery rate (cents on the dollar) 85.3 70.5 None in 2017/18 Time (years) 1.0 1.7 0.4 (Ireland) Cost (% of estate) 6.0 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going concern) 1 .. .. Strength of insolvency framework index (0-16) 11.0 11.9 None in 2017/18 Figure – Resolving Insolvency in United Kingdom and comparator economies – Ranking and Score DB 2019 Resolving Insolvency Score 0 100 90.91: United States (Rank: 3) 90.12: Germany (Rank: 4) 80.27: United Kingdom (Rank: 14) 79.12: Ireland (Rank: 18) 75.21: Regional Average (OECD high income) 74.08: France (Rank: 28) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in United Kingdom – Time and Cost Time (years) Cost (% of estate) 2 1.9 12 1.7 10.0 9.3 10 Cost (% of estate) 9.0 9.0 1.5 8.0 Time (years) 1.2 8 1.0 6.0 1.0 1 6 4 0.5 0.4 2 0 0 France Germany Ireland OECD United United high Kingdom States income Page 53 Doing Business 2019 United Kingdom Figure – Resolving Insolvency in United Kingdom and comparator economies – Measure of Quality the United Kingdom 5 3 2 1 France 6 3 1 1 Germany 6 3 3 3 Ireland 5 3 1 1.5 United States 6 3 3 3 OECD high income 5.3 2.8 2.2 1.9 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Figure – Resolving Insolvency in United Kingdom and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 100 85.3 86.0 80.4 81.8 80 73.8 70.5 60 40 20 0 United Kingdom France Germany Ireland United States OECD high income Page 54 Doing Business 2019 United Kingdom Details – Resolving Insolvency in United Kingdom Indicator Answer Score Proceeding reorganization BizBank will most likely apply for the administration procedure. The directors could file for administration or else BizBank could put the company into administration since it has a floating charge over substantially the whole of the company's property. Administration would be the most likely procedure to be chosen since it is a rescue procedure, designed to save all or part of the business. It would be more likely to preserve value for the creditors than a liquidation, where fire sales can depress the value of the company's property. An administrator's first objective is to rescue the company as a going concern, if possible. If this is not possible, his objective is to achieve a better result for the company's creditors as a whole than would be likely if the company were wound up, or failing that he must realize property to make a distribution to secured or preferential creditors. Outcome going concern The administrator will be focused on achieving the best outcome for the creditors as a whole and in this case, this would be achieved by the sale of the business as a going concern. The administration moratorium provides protection for the company from various creditor enforcement actions: - enforcement of security- repossession of hire-purchase goods- forfeiture by landlords- commencement of legal proceedings against the company. This moratorium gives the company a breathing space in which to implement a solution to its financial difficulties. The administrator takes over from the directors in the management of the company and has broad powers to carry on the business of the company so that it can continue to operate as a going concern. He can enter into new contracts on behalf of the company and pay the expenses of the administration in priority to all other creditors (apart from fixed charge holders) so that the business can continue to operate. The hotel is likely to be sold as a going concern. The administrator may continue to trade the business from administration while seeking a purchaser. Time (in years) 1.0 The administration procedure will take approximately one year. BizBank, the company's directors (probably with BizBank's approval), or (less likely in practice) the company acting on a majority resolution of its shareholders could apply for the company's administration. If BizBank puts the company into administration, it would give notice of intention to appoint administrators to any prior ranking qualifying floating charge holder (N.B. this can be dispensed with if BizBank is certain there are no such charge holders). 2 business days later, BizBank would file a notice of appointment of administrator (and various short accompanying documents) at court. The administrator's appointment takes effect from the moment of this filing. If the directors/company were to appoint the administrator, they would give notice of intention to appoint to BizBank. BizBank could either consent to the director/company's choice of administrator (probable since in practice the directors would probably consult BizBank on the choice of administrator) or appoint its own choice of administrator following the procedure above. Upon receiving Bizbank's consent, or after 5 business days if BizBank is silent and takes no action, the directors/company would file a notice of appointment and accompanying documents at court. The administrator's appointment takes effect from the moment of this filing. The administrator is obliged to advertise his appointment, to send notice of his appointment to all creditors of whom he is aware and to give his name and the fact of the administration on all business documents issued by the company or administrator and on any company website. The administrator would take control of the management of the company and continue to run the hotel whilst seeking a buyer for the business. The administrator's duty on any sale is to achieve fair market value at the time of the sale, although he is not obliged to wait to sell in case more favorable market conditions materialize. The administrator is not obliged to seek the creditors' consent before concluding a sale but he would likely discuss any potential sale with BizBank as the secured creditor who stands to recover its loan from the sale proceeds. Within the first 8 weeks, the administrator must send a statement of his proposals to all creditors and shareholders detailing, amongst other things, (a) how he envisages the purpose of administration will/has been achieved (in this case, sale of the business) and how the administration will be brought to an end; (b) a statement of the company's affairs; and (c) the basis upon which his remuneration will be fixed. The administrator must hold a creditors' meeting within the first 10 weeks to approve his proposals. This creditors' meeting is not required if the company has insufficient property to make a distribution to unsecured creditors (which may be the case here), although in this situation creditors with at least 10% of the total debts can order the administrator to summon a creditors' meeting if they wish. The administrator would also investigate the affairs of the company, in particular (a) directors' conduct to establish whether there are any grounds for a potential disqualification action; and (b) recent transactions to determine whether he should apply to court to challenge any as transactions at an undervalue, preferences or transactions defrauding creditors. The administrator would pay out BizBank after receiving the sale proceeds and deducting the expenses of the administration. Cost (% of 6.0 Major expenses include remuneration of the administrator (around 3%), auctioneer's fees (around estate) 1% and possible premium) and attorneys’ fees (around 2%). Recovery rate 85.3 (cents on the dollar) Page 55 Doing Business 2019 United Kingdom Details – Resolving Insolvency in United Kingdom – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 11.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may 1.0 file for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (a) Yes, a creditor 1.0 may file for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 5.0 Does the insolvency framework allow the continuation of contracts supplying essential goods No 0.0 and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after Yes 1.0 commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over 1.0 ordinary unsecured creditors but not over secured creditors Reorganization proceedings index (0-3) 1.0 Which creditors vote on the proposed reorganization plan? (b) Only creditors 1.0 whose rights are affected by the proposed plan Does the insolvency framework require that dissenting creditors in reorganization receive at No 0.0 least as much as what they would obtain in a liquidation? Are the creditors divided into classes for the purposes of voting on the reorganization plan, No 0.0 does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 2.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request information No 0.0 from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to decisions Yes 1.0 accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Page 56 Doing Business 2019 United Kingdom Labor Market Regulation Doing Business presents detailed data for the labor market regulation indicators on the Doing Business website (http://www.doingbusiness.org). The report does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions about the (i) whether fixed-term contracts are prohibited for worker and the business are used. permanent tasks; (ii) maximum cumulative duration of fixed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether - Operates a supermarket or grocery store in the economy’s largest business city. nonpregnant and nonnursing women can work For 11 economies the data are also collected for the second largest business city. same night hours as men; (v) length of paid annual - Has 60 employees. leave. - Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them. Redundancy rules - Abides by every law and regulation but does not grant workers more benefits than (i) whether redundancy can be basis for terminating those mandated by law, regulation or (if applicable) collective bargaining workers; (ii) whether employer needs to notify agreements. and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of five fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Page 57 Doing Business 2019 United Kingdom Labor Market Regulation - United Kingdom Details – Labor Market Regulation in United Kingdom Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single fixed-term contract (months) No limit Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 1365.3 Ratio of minimum wage to value added per worker 0.3 Maximum length of probationary period (months) 6.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 0.0 Premium for overtime work (% of hourly pay) 0.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 28.0 Paid annual leave for a worker with 5 years of tenure (working days) 28.0 Paid annual leave for a worker with 10 years of tenure (working days) 28.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 28.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 1.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 5.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 10.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 5.3 Severance pay for redundancy dismissal for a worker with 1 year of tenure 0.0 Page 58 Doing Business 2019 United Kingdom Severance pay for redundancy dismissal for a worker with 5 years of tenure 3.5 Severance pay for redundancy dismissal for a worker with 10 years of tenure 8.5 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 4.0 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 14.0 Receive 100% of wages on maternity leave? No Five fully paid days of sick leave a year? No Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 0.0 Page 59 Doing Business 2019 United Kingdom Business Reforms in United Kingdom In the past year, Doing Business observed a peaking of reform activity worldwide. From June 2, 2017, to May 1, 2018, 128 economies implemented a record 314 regulatory reforms improving the business climate. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more difficult to do business. DB2019 Getting Electricity: The United Kingdom made getting electricity faster by implementing several initiatives to expedite the external connection works performed by sub-contractors. DB2016 Paying Taxes: The United Kingdom made paying taxes less costly for companies by reducing the corporate income tax rate and increasing the wage amount per employee that is exempted from social security contributions paid by employers. On the other hand, the United Kingdom increased municipal tax rates and environment taxes. Enforcing Contracts: The United Kingdom made enforcing contracts more costly by increasing the court fees for filing a claim. DB2015 Starting a Business: The United Kingdom made starting a business easier by speeding up tax registration. Paying Taxes: The United Kingdom made paying taxes less costly for companies by reducing the corporate income tax rate. On the other hand, it increased the landfill tax. DB2014 Starting a Business: The United Kingdom made starting a business easier by providing model articles for use in preparing memorandums and articles of association. Registering Property: The United Kingdom made transferring property easier by introducing electronic lodgment for property transfer applications. Labor Market Regulation: United Kingdom increased the cap on weekly wage provided to employees on the severance payment and the minimum wage. DB2013 Paying Taxes: The United Kingdom made paying taxes less costly for companies by reducing the corporate income tax rate. Labor Market Regulation: The United Kingdom increased redundancy costs of the severance pay applicable in cases of redundancy dismissals. DB2012 Dealing with Construction Permits: The United Kingdom made dealing with construction permits easier by increasing efficiency in the issuance of planning permits. Labor Market Regulation: United Kingdom increased the severance payment obligation applicable in cases of redundancy dismissals. DB2011 Enforcing Contracts: The United Kingdom improved the process for enforcing contracts by modernizing civil procedures in the commercial court. Resolving Insolvency: Amendments to the United Kingdom’s insolvency rules streamline bankruptcy procedures, favor the sale of the firm as a whole and improve the calculation of administrators’ fees. DB2010 Dealing with Construction Permits: The United Kingdom made dealing with construction permits easier and less time consuming through wider use of approved inspectors. Registering Property: The United Kingdom speeded up property registration by introducing automatic electronic processing of the land transaction return. Labor Market Regulation: The United Kingdom increased mandatory paid annual leave. Page 60 Doing Business 2019 United Kingdom DB2009 Labor Market Regulation: The United Kingdom increased the mandatory paid annual leave. Page 61 Doing Business 2019 United Kingdom Page 62