Economy Profile
United Kingdom
United Kingdom
Doing Business
2020
Page 1
Economy Profile of
United Kingdom
Doing Business 2020 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 postfiling
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
Employing workers
Flexibility in employment regulation and redundancy cost
United Kingdom
Doing Business
2020
Page 2
About Doing Business
The
project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and
regional level.
Doing Business
The
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.
also measures features of employing workers. Although
does not present rankings
of economies on the employing workers 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.
Doing Business
Doing Business Doing Business
By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time,
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.
Doing Business
In addition,
offers detailed
, which exhaustively cover business regulation and reform in different cities and regions within a nation.
These studies 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
has ranked.
Doing Business
subnational studies
Doing Business
The first
study, published in 2003, covered 5 indicator sets and 133 economies. This year’s study 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
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.
Doing Business
Doing Business
To learn more about
please visit
Doing Business
doingbusiness.org
United Kingdom
Doing Business
2020
Page 3
Ease of Doing Business in
United Kingdom
Region
OECD high income
Income Category
High income
Population
66,488,991
City Covered
London
8
DB RANK DB SCORE
83.5
Rankings on Doing Business topics -
United Kingdom
18
23
8
41
37
7
27
33
34
14
Starting
a
Business
Dealing
with
Construction
Permits
Getting
Electricity
Registering
Property
Getting
Credit
Protecting
Minority
Investors
Paying
Taxes
Trading
across
Borders
Enforcing
Contracts
Resolving
Insolvency
Topic Scores
94.6 80.3 96.9 75.7 75.0 84.0 86.2 93.8 68.7 80.3
(rank)
Starting a Business
18
Score of starting a business (0-100)
94.6
Procedures (number)
4
Time (days)
4.5
Cost (number)
0
Paid-in min. capital (% of income per capita)
0.0
(rank)
Dealing with Construction Permits
23
Score of dealing with construction permits (0-100)
80.3
Procedures (number)
9
Time (days)
86
Cost (% of warehouse value)
1.1
Building quality control index (0-15)
9.0
(rank)
Getting Electricity
8
Score of getting electricity (0-100)
96.9
Procedures (number)
3
Time (days)
46
Cost (% of income per capita)
23.1
Reliability of supply and transparency of tariff index (0-8)
8
(rank)
Registering Property
41
Score of registering property (0-100)
75.7
Procedures (number)
6
Time (days)
21.5
Cost (% of property value)
4.8
Quality of the land administration index (0-30)
26.0
(rank)
Getting Credit
37
Score of getting credit (0-100)
75.0
Strength of legal rights index (0-12)
7
Depth of credit information index (0-8)
8
Credit registry coverage (% of adults)
0.0
Credit bureau coverage (% of adults)
100.0
(rank)
Protecting Minority Investors
7
Score of protecting minority investors (0-100)
84.0
Extent of disclosure index (0-10)
10.0
Extent of director liability index (0-10)
7.0
Ease of shareholder suits index (0-10)
8.0
Extent of shareholder rights index (0-6)
6.0
Extent of ownership and control index (0-7)
5.0
Extent of corporate transparency index (0-7)
6.0
(rank)
Paying Taxes
27
Score of paying taxes (0-100)
86.2
Payments (number per year)
9
Time (hours per year)
114
Total tax and contribution rate (% of profit)
30.6
Postfiling index (0-100)
71.0
(rank)
Trading across Borders
33
Score of trading across borders (0-100)
93.8
Time to export
Documentary compliance (hours)
4
Border compliance (hours)
24
Cost to export
Documentary compliance (USD)
25
Border compliance (USD)
280
Time to export
Documentary compliance (hours)
2
Border compliance (hours)
3
Cost to export
Documentary compliance (USD)
0
Border compliance (USD)
0
(rank)
Enforcing Contracts
34
Score of enforcing contracts (0-100)
68.7
Time (days)
437
Cost (% of claim value)
45.7
Quality of judicial processes index (0-18)
15.0
(rank)
Resolving Insolvency
14
Score of resolving insolvency (0-100)
80.3
Recovery rate (cents on the dollar)
85.4
Time (years)
1.0
Cost (% of estate)
6.0
Outcome (0 as piecemeal sale and 1 as going
concern)
1
Strength of insolvency framework index (0-16)
11.0
United Kingdom
Doing Business
2020
Page 4
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,
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.
Doing Business
The most recent round of data collection for the project was completed in May 2019.
.
See the methodology for more information
What the indicators measure
Procedures to legally start and formally operate a company
(number)
Preregistration (for example, name verification or reservation,
notarization)
•
Registration in the economy’s largest business city
•
Postregistration (for example, social security registration,
company seal)
•
Obtaining approval from spouse to start a business or to leave
the home to register the company
•
Obtaining any gender specific document for company
registration and operation or national identification card
•
Time required to complete each procedure (calendar days)
Does not include time spent gathering information
•
Each procedure starts on a separate day (2 procedures cannot
start on the same day)
•
Procedures fully completed online are recorded as ½ day
•
Procedure is considered completed once final document is
received
•
No prior contact with officials
•
Cost required to complete each procedure (% of income per
capita)
Official costs only, no bribes
•
No professional fees unless services required by 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
Case study assumptions
To make the data comparable across economies, several assumptions about the business and the
procedures are used. It is assumed that any required information is readily available and that the
entrepreneur will pay no bribes.
The business:
-Is a limited liability company (or its legal equivalent). If there is more than one type of limited
liability company in the economy, the limited liability form most common among domestic firms is
chosen. Information on the most common form is obtained from incorporation lawyers or the
statistical office.
-Operates in the economy’s largest business city. For 11 economies the data are also collected for
the second largest business city.
-Performs general industrial or commercial activities such as the production or sale to the public of
goods or services. The business does not perform foreign trade activities and does not handle
products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily
polluting production processes.
-Does not qualify for investment incentives or any special benefits.
-Is 100% domestically owned.
-Has five business owners, none of whom is a legal entity. One business owner holds 30% of the
company shares, two owners have 20% of shares each, and two owners have 15% of shares
each.
-Is managed by one local director.
-Has between 10 and 50 employees one month after the commencement of operations, all of them
domestic nationals.
-Has start-up capital of 10 times income per capita.
-Has an estimated turnover of at least 100 times income per capita.
-Leases the commercial plant or offices and is not a proprietor of real estate.
-Has an annual lease for the office space equivalent to one income per capita.
-Is in an office space of approximately 929 square meters (10,000 square feet).
-Has a company deed that is 10 pages long.
The owners:
-Have reached the legal age of majority and are capable of making decisions as an adult. If there
is no legal age of majority, they are assumed to be 30 years old.
-Are in good health and have no criminal record.
-Are married, the marriage is monogamous and registered with the authorities.
-Where the answer differs according to the legal system applicable to the woman or man in
question (as may be the case in economies where there is legal plurality), the answer used will be
the one that applies to the majority of the population.
United Kingdom
Doing Business
2020
Page 5
Starting a Business - United Kingdom
Figure – Starting a Business in United Kingdom – Score
Procedures
82.4
Time
96.0
Cost
100.0
Paid-in min. capital
100.0
Figure – Starting a Business in United Kingdom and comparator economies – Ranking and Score
DB 2020 Starting a Business Score
0 100
94.6: United Kingdom (Rank: 18)
94.4: Ireland (Rank: 23)
93.1: France (Rank: 37)
91.6: United States (Rank: 55)
91.3: Regional Average (OECD high income)
83.7: Germany (Rank: 125)
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.
Standardized Company
Legal form
Private Limited Company (Ltd)
Paid-in minimum capital requirement
No minimum
City Covered
London
Indicator
United Kingdom
OECD high income
Best Regulatory Performance
Procedure – Men (number)
4
4.9
1 (2 Economies)
Time – Men (days)
4.5
9.2
0.5 (New Zealand)
Cost – Men (% of income per capita)
0.0
3.0
0.0 (2 Economies)
Procedure – Women (number)
4
4.9
1 (2 Economies)
Time – Women (days)
4.5
9.2
0.5 (New Zealand)
Cost – Women (% of income per capita)
0.0
3.0
0.0 (2 Economies)
Paid-in min. capital (% of income per capita)
0.0
7.6
0.0 (120 Economies)
United Kingdom
Doing Business
2020
Page 6
Figure – Starting a Business in United Kingdom – Procedure, Time and Cost
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
website (
). For details on the procedures
reflected here, see the summary below.
Doing Business
http://doingbusiness.org/en/methodology
Procedures (number)
1 2 * 3 4
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Time (days)
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
0.04
0.045
Cost (% of income per capita)
Time (days) Cost (% of income per capita)
United Kingdom
Doing Business
2020
Page 7
Details – Starting a Business in United Kingdom – Procedure, Time and Cost
No.
Procedures
Time to Complete
Associated Costs
1
Complete application form IN01 and file for registration with Companies House
: Companies House
Agency
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.
Less than one day
(online procedure)
GBP 12 for online
registration
2
Register for PAYE
: HMRC
Agency
The company must contact the HMRC to set up a contribution scheme for 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 have 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.
3 days
no charge
3
Register for VAT
: HMRC
Agency
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 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.
2 days
no charge
United Kingdom
Doing Business
2020
Page 8
Takes place simultaneously with previous procedure.
4
Sign up for employer’s liability insurance
: Insurance company
Agency
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.
1 day
no charge
United Kingdom
Doing Business
2020
Page 9
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 2019.
See the methodology for more information
What the indicators measure
Procedures to legally build a warehouse (number)
Submitting all relevant documents and obtaining all necessary
clearances, licenses, permits and certificates
•
Submitting all required notifications and receiving all necessary
inspections
•
Obtaining utility connections for water and sewerage
•
Registering and selling the warehouse after its completion
•
Time required to complete each procedure (calendar days)
Does not include time spent gathering information
•
Each procedure starts on a separate day—though procedures
that can be fully completed online are an exception to this rule
•
Procedure is considered completed once final document is
received
•
No prior contact with officials
•
Cost required to complete each procedure (% of income per
capita)
Official costs only, no bribes
•
Building quality control index (0-15)
Quality of building regulations (0-2)
•
Quality control before construction (0-1)
•
Quality control during construction (0-3)
•
Quality control after construction (0-3)
•
Liability and insurance regimes (0-2)
•
Professional certifications (0-4)
•
Case study assumptions
To make the data comparable across economies, several assumptions about the construction
company, the warehouse project and the utility connections are used.
The construction company (BuildCo):
- 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 largest business city.
- Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a
licensed architect and a licensed engineer, both registered with 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 topographical experts.
- Owns the land on which the warehouse will be built and will sell the warehouse upon its
completion.
The warehouse:
- 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 approximately 1,300.6
square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be
located on a land plot of approximately 929 square meters (10,000 square feet) that is 100%
owned by BuildCo, and the warehouse is valued at 50 times income per capita.
- Will have complete architectural and technical plans prepared by a licensed architect. If
preparation of the plans requires such steps as obtaining further documentation or getting prior
approvals from external agencies, these are counted as procedures.
- Will take 30 weeks to construct (excluding all delays due to administrative and regulatory
requirements).
The water and sewerage connections:
- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water
delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage
infrastructure, a septic tank in the smallest size available will be installed or built.
- Will have an average water use of 662 liters (175 gallons) a day and an average 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 gallons) a day.
- 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.
United Kingdom
Doing Business
2020
Page 10
Dealing with Construction Permits - United Kingdom
Figure – Dealing with Construction Permits in United Kingdom – Score
Procedures
84.0
Time
82.7
Cost
94.6
Building quality control index
60.0
Figure – Dealing with Construction Permits in United Kingdom and comparator economies – Ranking and Score
DB 2020 Dealing with Construction Permits Score
0 100
80.3: United Kingdom (Rank: 23)
80.0: United States (Rank: 24)
78.2: Germany (Rank: 30)
76.6: Ireland (Rank: 36)
75.6: Regional Average (OECD high income)
74.3: France (Rank: 52)
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.
Standardized Warehouse
Estimated value of warehouse
GBP 1,572,579.70
City Covered
London
Indicator
United Kingdom
OECD high income
Best Regulatory Performance
Procedures (number)
9
12.7
None in 2018/19
Time (days)
86
152.3
None in 2018/19
Cost (% of warehouse value)
1.1
1.5
None in 2018/19
Building quality control index (0-15)
9.0
11.6
15.0 (6 Economies)
United Kingdom
Doing Business
2020
Page 11
Figure – Dealing with Construction Permits in United Kingdom – Procedure, Time and Cost
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
website (
). For details on the procedures
reflected here, see the summary below.
Doing Business
http://doingbusiness.org/en/methodology
Procedures (number)
1 * 2 3 4 5 6 * 7 8 9
0
10
20
30
40
50
60
70
80
Time (days)
0
0.1
0.2
0.3
0.4
0.5
0.6
Cost (% of warehouse value)
Time (days) Cost (% of warehouse value)
United Kingdom
Doing Business
2020
Page 12
Figure – Dealing with Construction Permits in United Kingdom and comparator economies – Measure of Quality
United
Kingdom
France Germany Ireland United
States
OECD
high
income
0
2
4
6
8
10
12
14
Index score
9.0
13.0
9.5
13.0
12.4
11.6
Details – Dealing with Construction Permits in United Kingdom – Procedure, Time and Cost
No.
Procedures
Time to Complete
Associated Costs
1
Obtain planning permission
: Planning Department of Local Authority
Agency
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).
56 days
GBP 8,012
United Kingdom
Doing Business
2020
Page 13
2
Hire an Approved Inspector
: Approved Inspector
Agency
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
1 day
GBP 2,964
3
Approved Inspector files the initial notice to the Local Authority
: Local Authority
Agency
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).
5 days
no charge
4
Apply for water and sewage connection
: Thames Water Utilities Ltd.
Agency
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.
1 day
GBP 485
United Kingdom
Doing Business
2020
Page 14
5
Receive inspection from the water and sewage provider
: Thames Water Utilities Ltd.
Agency
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.
1 day
no charge
6
Submit application to local Fire and Rescue Authority and obtain approval
: Fire and Rescue Authority
Agency
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.
21 days
no charge
7
Obtain water and sewerage connection
: Thames Water Utilities Ltd.
Agency
20 days
GBP 5,321
8
Request and receive energy performance certificate from Accredited Energy Assessor
: Accredited Energy Assessor
Agency
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.
1 day
GBP 78
9
File completion certificate with the Local Building Control Department
: Local Building Control Department
Agency
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.
1 day
no charge
United Kingdom
Doing Business
2020
Page 15
Takes place simultaneously with previous procedure.
United Kingdom
Doing Business
2020
Page 16
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; Free
of charge.
1.0
Which requirements for obtaining a building permit are clearly specified in the building regulations or on any
accessible website, brochure or pamphlet? (0-1)
List of required
documents; Fees to
be paid; Required
preapprovals.
1.0
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 compliance with existing
building regulations? (0-1)
Licensed engineer;
Private firm.
1.0
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? (0-2)
Inspections by
external engineer or
firm; Risk-based
inspections.
2.0
Do legally mandated inspections occur in practice during construction? (0-1)
Mandatory
inspections are
always done in
practice.
1.0
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 with the approved
plans and regulations? (0-2)
Yes, external
engineer submits
report for final
inspection.
2.0
Do legally mandated final inspections occur in practice? (0-1)
Final inspection
always occurs in
practice.
1.0
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 once it is in use
(Latent Defect Liability or Decennial Liability)? (0-1)
No party is held liable
under the law.
0.0
Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or
problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1)
No party is required
by law to obtain
insurance .
0.0
Professional certifications index (0-4)
0.0
What are the qualification requirements for the professional responsible for verifying that the architectural plans
or drawings are in compliance with existing building regulations? (0-2)
Minimum number of
years of experience;
Being a registered
architect or engineer.
0.0
What are the qualification requirements for the professional who supervises the construction on the ground? (0-
2)
Being a registered
architect or engineer.
0.0
United Kingdom
Doing Business
2020
Page 17
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 2019.
.
See the methodology for more information
What the indicators measure
Procedures to obtain an electricity connection (number)
Submitting all relevant documents and obtaining all necessary
clearances and permits
•
Completing all required notifications and receiving all necessary
inspections
•
Obtaining external installation works and possibly purchasing
material for these works
•
Concluding any necessary supply contract and obtaining final
supply
•
Time required to complete each procedure (calendar days)
Is at least 1 calendar day
•
Each procedure starts on a separate day
•
Does not include time spent gathering information
•
Reflects the time spent in practice, with little follow-up and no
prior contact with officials
•
Cost required to complete each procedure (% of income per
capita)
Official costs only, no bribes
•
Value added tax excluded
•
The reliability of supply and transparency of tariffs index (0-8)
Duration and frequency of power outages (0–3)
•
Tools to monitor power outages (0–1)
•
Tools to restore power supply (0–1)
•
Regulatory monitoring of utilities’ performance (0–1)
•
Financial deterrents limiting outages (0–1)
•
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:
measures the price of electricity, but it is
not included in the ease of doing business score nor in the ranking
on the ease of getting electricity.
Doing Business
Case study assumptions
To make the data comparable across economies, several assumptions about the warehouse, the
electricity connection and the monthly consumption are used.
The warehouse:
- Is owned by a local entrepreneur and is used for storage of goods.
- Is located in the economy’s largest business city. For 11 economies the data are also collected for
the second largest business city.
- Is located in an area where similar warehouses are typically located and is in an 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.
- Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square
feet). The plot of land on which it is built is 929 square meters (10,000 square feet).
The electricity connection:
- Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-
kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).
- 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 common in the area where the
warehouse is located and requires works that involve the crossing of a 10-meter road (such as by
excavation or overhead lines) but are all carried out on public land. There is no crossing of other
owners’ private property because the warehouse has access to a road.
- Does not require work to install the internal wiring of the warehouse. This has already been
completed up to and including the customer’s service panel or switchboard and the meter base.
The monthly consumption:
- It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours
a day), with equipment utilized at 80% of capacity on average and that 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.
- If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.
- 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 purposes only 30 days are used.
United Kingdom
Doing Business
2020
Page 18
Getting Electricity - United Kingdom
Figure – Getting Electricity in United Kingdom – Score
Procedures
100.0
Time
87.8
Cost
99.7
Reliability of supply and transparency of
tariff index
100.0
Figure – Getting Electricity in United Kingdom and comparator economies – Ranking and Score
DB 2020 Getting Electricity Score
0 100
98.8: Germany (Rank: 5)
96.9: United Kingdom (Rank: 8)
92.0: France (Rank: 17)
85.9: Regional Average (OECD high income)
84.2: Ireland (Rank: 47)
82.2: United States (Rank: 64)
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.
Figure – Getting Electricity in United Kingdom – Procedure, Time and Cost
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
website (
). For details on the procedures
Doing Business
http://doingbusiness.org/en/methodology
Procedures (number)
1 * 2 3
0
5
10
15
20
25
30
35
40
45
Time (days)
0
5
10
15
20
25
Cost (% of income per capita)
Time (days) Cost (% of income per capita)
Standardized Connection
Name of utility
UK Power Networks
Price of electricity (US cents per kWh)
17.7
City Covered
London
Indicator
United Kingdom
OECD high income
Best Regulatory Performance
Procedures (number)
3
4.4
3 (28 Economies)
Time (days)
46
74.8
18 (3 Economies)
Cost (% of income per capita)
23.1
61.0
0.0 (3 Economies)
Reliability of supply and transparency of tariff index (0-8)
8
7.4
8 (26 Economies)
United Kingdom
Doing Business
2020
Page 19
reflected here, see the summary below.
Figure – Getting Electricity in United Kingdom and comparator economies – Measure of Quality
United
Kingdom
France Germany Ireland United
States
OECD
high
income
6.4
6.6
6.8
7
7.2
7.4
7.6
7.8
8
8.2
Index score
8 8 8 8
7
7.4
United Kingdom
Doing Business
2020
Page 20
Details – Getting Electricity in United Kingdom – Procedure, Time and Cost
Takes place simultaneously with previous procedure.
No.
Procedures
Time to Complete
Associated Costs
1
Submit application to UK Power Networks and await and accept estimate
: UK Power Networks
Agency
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.
16 calendar days
GBP 0
2
Sign supply contract with supplier
: Supplier
Agency
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.
1 calendar day
GBP 0
3
Receive external connection works, meter installation and electricity flow
: UK Power Networks/Supplier
Agency
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.
30 calendar days
GBP 7,256.9
United Kingdom
Doing Business
2020
Page 21
Details – Getting Electricity in United Kingdom – Measure of Quality
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.
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 supply?
Yes
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 exceed a certain cap?
Yes
Communication of tariffs and tariff changes (0-1)
1
Are effective tariffs available online?
Yes
Link to the website, if available online
https://www.businesscom
parison.com/compare-
business-
energy/form/electric
Are customers notified of a change in tariff ahead of the billing cycle?
Yes
United Kingdom
Doing Business
2020
Page 22
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 2019.
.
See the methodology for more information
What the indicators measure
Procedures to legally transfer title on immovable property
(number)
Preregistration procedures (for example, checking for liens,
notarizing sales agreement, paying property transfer taxes)
•
Registration procedures in the economy's largest business city.
•
Postregistration procedures (for example, filling title with
municipality)
•
Time required to complete each procedure (calendar days)
Does not include time spent gathering information
•
Each procedure starts on a separate day - though procedures
that can be fully completed online are an exception to this rule
•
Procedure is considered completed once final document is
received
•
No prior contact with officials
•
Cost required to complete each procedure (% of property
value)
Official costs only (such as administrative fees, duties and
taxes).
•
Value Added Tax, Capital Gains Tax and illicit payments are
excluded
•
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)
•
Case study assumptions
To make the data comparable across economies, several assumptions about the parties to the
transaction, the property and the procedures are used.
The parties (buyer and seller):
- Are limited liability companies (or the legal equivalent).
- Are located in the periurban (that is, on the outskirts of the city but still within its official limits)
area of the economy’s largest business city. For 11 economies the data are also collected for the
second largest business city.
- Are 100% domestically and privately owned.
- Perform general commercial activities.
The property (fully owned by the seller):
- Has a value of 50 times income per capita, which equals the sale price.
- Is fully owned by the seller.
- Has no mortgages attached and has been under the same ownership for the past 10 years.
- Is registered in the land registry or cadastre, or both, and is free of title disputes.
- Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its
official limits), and no rezoning is required.
- Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two-
story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse
is 10 years old, is in good condition, has no 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 entirety.
- Will not be subject to renovations or additional construction following the purchase.
- Has no trees, natural water sources, natural reserves or historical monuments of any kind.
- Will not be used for special purposes, and no special permits, such as for residential use,
industrial plants, waste storage or certain types of agricultural activities, are required.
- Has no occupants, and no other party holds a legal interest in it.
United Kingdom
Doing Business
2020
Page 23
Registering Property - United Kingdom
Figure – Registering Property in United Kingdom – Score
Procedures
58.3
Time
90.2
Cost
67.8
Quality of the land administration index
86.7
Figure – Registering Property in United Kingdom and comparator economies – Ranking and Score
DB 2020 Registering Property Score
0 100
77.0: Regional Average (OECD high income)
76.9: United States (Rank: 39)
75.7: United Kingdom (Rank: 41)
71.7: Ireland (Rank: 60)
66.6: Germany (Rank: 76)
63.3: France (Rank: 99)
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.
Indicator
United Kingdom
OECD high income
Best Regulatory Performance
Procedures (number)
6
4.7
1 (5 Economies)
Time (days)
21.5
23.6
1 (2 Economies)
Cost (% of property value)
4.8
4.2
0.0 (Saudi Arabia)
Quality of the land administration index (0-30)
26.0
23.2
None in 2018/19
United Kingdom
Doing Business
2020
Page 24
Figure – Registering Property in United Kingdom – Procedure, Time and Cost
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
website (
). For details on the procedures
reflected here, see the summary below.
Doing Business
http://doingbusiness.org/en/methodology
Procedures (number)
1 * 2 3 * 4 5 6
0
5
10
15
20
Time (days)
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Cost (% of property value)
Time (days) Cost (% of property value)
United Kingdom
Doing Business
2020
Page 25
Figure – Registering Property in United Kingdom and comparator economies – Measure of Quality
United
Kingdom
France Germany Ireland United
States
OECD
high
income
0
5
10
15
20
25
30
Index score
26.0
24.0
23.0
23.5
17.6
23.2
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 pack
: Solicitors of the parties
Agency
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.
19 days
GBP 6,750; (GBP 3,500 -
GBP 10,000)
2
Conduct searches on the property
: Search portal
Agency
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.
14 days
GBP 650; (GBP 300 to
GBP 1000)
United Kingdom
Doing Business
2020
Page 26
Takes place simultaneously with previous procedure.
3
Drafting of contracts and exchange of contracts once agreed
: Lawyer's office
Agency
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).
1 day
included in Procedure 1
4
Pre-completion search with priority requested at the Land Registry
: HM Land Registry
Agency
The buyer's solicitor raises pre-completion inquiries of the seller's solicitor known as 'requisitions
on title' and a 'pre-completion search with priority' in order to block any movements on the
property until completion of the property transfer.
Less than one day,
online
GBP 3; (GBP 3 if lodged
electronically; GBP 7 if
lodged in paper)
5
Complete and lodge a Land Transaction Return and pay the Stamp Duty Land Tax (SDLT)
(available on-line)
: HM Revenue & Customs
Agency
The buyer's solicitor would usually prepare the Land Transaction Return for the approval of the
buyer (as SDLT is a self-assessment tax) prior to completion. For every land transaction the
purchaser must complete, sign and send the land 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.
Less than one day,
online
GBP 68,128.92; (Up to
GBP 150,000: 0%
GBP 150,001 to GBP
250,000: 2%
GBP 250,001+: 5%)
6
The transfer and any legal charges are registered at the Land Registry
: HM Land Registry
Agency
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.
Less than one day,
online
GBP 455
United Kingdom
Doing Business
2020
Page 27
Details – Registering Property in United Kingdom – Measure of Quality
Answer
Score
Quality of the land administration index (0-30)
26.0
Reliability of infrastructure index (0-8)
8.0
Type of land registration system in the economy:
Title Registration
System
What is the institution in charge of immovable property registration?
Her Majesty's Land
Registry
In what format are past and newly issued land records kept at the immovable property registry of the largest
business city of the economy —in a paper format or in a computerized format (scanned or fully digital)?
Computer/Fully digital
2.0
Is there a comprehensive and functional electronic database for checking for encumbrances (liens, mortgages,
restrictions and the like)?
Yes
1.0
Institution in charge of the plans showing legal boundaries in the largest business city:
Her Majesty's Land
Registry
In what format are past and newly issued cadastral plans kept at the mapping agency of the largest business
city of the economy—in a paper format or in a computerized format (scanned or fully digital)?
Computer/Fully digital
2.0
Is there an electronic database for recording boundaries, checking plans and providing cadastral information
(geographic information system)?
Yes
1.0
Is the information recorded by the immovable property registration agency and the cadastral or mapping agency
kept in a single database, in different but linked databases or in separate databases?
Different databases
but linked
1.0
Do the immovable property registration agency and cadastral or mapping agency use the same identification
number for properties?
Yes
1.0
Transparency of information index (0–6)
6.0
Who is able to obtain information on land ownership at the agency in charge of immovable property registration
in the largest business city?
Anyone who pays the
official fee
1.0
Is the list of documents that are required to complete any type of property transaction made publicly available–
and if so, how?
Yes, online
0.5
Link for online access:
https://www.gov.uk/go
vernment/collections/
hm-land-registry-
forms
Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable
property registration in the largest business city made publicly available–and if so, how?
Yes, online
0.5
Link for online access:
https://www.gov.uk/gu
idance/hm-land-
registry-registration-
services-fees
Does the agency in charge of immovable property registration agency formally commit to deliver a legally
binding document that proves property ownership within a specific timeframe –and if so, how does it
communicate the service standard?
Yes, online
0.5
Link for online access:
https://www.gov.uk/go
vernment/publications
/hm-land-registry-
service-
standards/our-
service-standards
Is there a specific and independent mechanism for filing complaints about a problem that occurred at the agency
in charge of immovable property registration?
Yes
1.0
Contact information:
https://www.gov.uk/go
vernment/organisatio
ns/land-
registry/about/compla
ints-procedure
Are there publicly available official statistics tracking the number of transactions at the immovable property
registration agency?
Yes
0.5
United Kingdom
Doing Business
2020
Page 28
Number of property transfers in the largest business city in 2018:
176909.0
Who is able to consult maps of land plots in the largest business city?
Anyone who pays the
official fee
0.5
Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how?
Yes, online
0.5
Link for online access:
https://www.gov.uk/go
vernment/collections/f
ees-hm-land-registry-
guides
Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—and
if so, how does it communicate the service standard?
Yes, online
0.5
Link for online access:
https://www.gov.uk/go
vernment/publications
/hm-land-registry-
service-
standards/our-
service-
standards#note-2
Is there a specific and independent mechanism for filing complaints about a problem that occurred at the
cadastral or mapping agency?
Yes
0.5
Contact information:
https://www.gov.uk/go
vernment/organisatio
ns/land-
registry/about/compla
ints-procedure
Geographic coverage index (0–8)
4.0
Are all privately held land plots in the largest business city formally registered at the immovable property
registry?
No
0.0
Are all privately held land plots in the economy formally registered at the immovable property registry?
No
0.0
Are all privately held land plots in the largest business city mapped?
Yes
2.0
Are all privately held land plots in the economy 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 property registry to make
them opposable to third parties?
Yes
1.5
Legal basis:
Section 4 and Section
27 and Schedule 2 of
the Land Registration
Act 2002
Is the system of immovable property registration subject to a state or private guarantee?
Yes
0.5
Type of guarantee:
State guarantee
Legal basis:
Section 103 and
Schedule 8 of the
Land Registration Act
2002
Is there a is a specific, out-of-court compensation mechanism to cover for losses incurred by parties who
engaged in good faith in a property transaction based on erroneous information certified by the immovable
property registry?
Yes
0.5
Legal basis:
Section 103 and
Schedule 8 to the
Land Registration Act
2002. Indemnity is
payable for losses
incurred because of,
for example, a
mistake in an official
search or an official
copy. Please see
schedule 8 for details.
United Kingdom
Doing Business
2020
Page 29
Does the legal system require a control of legality of the documents necessary for a property transaction (e.g.,
checking the compliance of contracts with requirements of the law)?
Yes
0.5
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 transaction?
Yes
0.5
If yes, who is responsible for verifying the identity of the parties?
Registrar; Lawyer;
Is there a national database to verify the accuracy of government issued identity documents?
Yes
1.0
What is the Court of first instance in charge of a case involving a standard land dispute between two local
businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located
in the largest business city?
Land Registration
division of the
Property Chamber,
First-tier Tribunal
How long does it take on average to obtain a decision from the first-instance court for such a case (without
appeal)?
Less than a year
3.0
Are there publicly available statistics on the number of land disputes at the economy level in the first instance
court?
Yes
0.5
Number of land disputes in the economy in 2018:
1030.0
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
United Kingdom
Doing Business
2020
Page 30
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 2019.
.
See the methodology for more information
What the indicators measure
Strength of legal rights index (0–12)
Rights of borrowers and lenders through collateral laws (0-10)
•
Protection of secured creditors’ rights through bankruptcy laws
(0-2)
•
Depth of credit information index (0–8)
Scope and accessibility of credit information distributed by
credit bureaus and credit registries (0-8)
•
Credit bureau coverage (% of adults)
Number of individuals and firms listed in largest credit bureau
as a percentage of adult population
•
Credit registry coverage (% of adults)
Number of individuals and firms listed in credit registry as a
percentage of adult population
•
Case study assumptions
assesses the sharing of credit information and the legal rights of borrowers and
lenders with respect to secured transactions through 2 sets of indicators. The depth of credit
information index measures rules and practices affecting the coverage, scope and accessibility of
credit information available through a credit registry or a credit bureau. The strength of legal rights
index 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 determined whether a unitary
secured transactions system exists. Then two case scenarios, case A and case B, are used to
determine how a nonpossessory security interest is created, publicized and enforced according to
the law. Special emphasis 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
secured lender, BizBank.
Doing Business
In some economies the legal framework for secured transactions will allow only case A or case B
(not both) to apply. Both cases examine the same set of legal provisions relating to the use of
movable collateral.
Several assumptions about the secured borrower (ABC) and lender (BizBank) 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.
United Kingdom
Doing Business
2020
Page 31
Getting Credit - United Kingdom
Figure – Getting Credit in United Kingdom – Score
Score - Getting Credit
75.0
Figure – Getting Credit in United Kingdom and comparator economies – Ranking and Score
DB 2020 Getting Credit Score
0 100
95.0: United States (Rank: 4)
75.0: United Kingdom (Rank: 37)
70.0: Germany (Rank: 48)
70.0: Ireland (Rank: 48)
64.3: Regional Average (OECD high income)
50.0: France (Rank: 104)
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.
Indicator
United Kingdom
OECD high income
Best Regulatory Performance
Strength of legal rights index (0-12)
7
6.1
12 (5 Economies)
Depth of credit information index (0-8)
8
6.8
8 (53 Economies)
Credit registry coverage (% of adults)
0.0
24.4
100.0 (2 Economies)
Credit bureau coverage (% of adults)
100.0
66.7
100.0 (14 Economies)
United Kingdom
Doing Business
2020
Page 32
Figure – Legal Rights in United Kingdom and comparator economies
United
Kingdom
France Germany Ireland United
States
OECD
high
income
0
2
4
6
8
10
12
Index Score
7
4
6
7
11
6.1
United Kingdom
Doing Business
2020
Page 33
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 enforcement of functional equivalents
to security interests in movable assets exist in the economy?
No
Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description
of collateral?
Yes
Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of
collateral?
Yes
May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the
original assets?
Yes
Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties;
and can the collateral agreement include a maximum amount for which the assets are encumbered?
Yes
Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an
electronic database indexed by debtor's name?
No
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 online by any interested third
party?
No
Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure?
Yes
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 procedure? Does the law
protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it?
No
Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow 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?
Yes
Figure – Credit Information in United Kingdom and comparator economies
United
Kingdom
France Germany Ireland United
States
OECD
high
income
0
1
2
3
4
5
6
7
8
9
Index Score
8
6
8
7
8
6.8
United Kingdom
Doing Business
2020
Page 34
Details – Credit Information in United Kingdom
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.
Depth of credit information index (0-8)
Credit bureau
Credit registry
Score
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
financial institutions - distributed?
Yes
No
1
Are at least 2 years of historical data distributed? (Credit bureaus and registries
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.)
Yes
No
1
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
credit registry?
Yes
No
1
Can banks and financial institutions access borrowers’ credit information online
(for example, through an online platform, a system-to-system connection or
both)?
Yes
No
1
Are bureau or registry credit scores offered as a value-added service to help
banks and financial institutions assess the creditworthiness of borrowers?
Yes
No
1
Total Score ("yes" to either public bureau or private registry)
8
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
0.0
United Kingdom
Doing Business
2020
Page 35
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 2019.
.
See the methodology for more information
What the indicators measure
: Disclosure, review, and
approval requirements for related-party transactions
•
Extent of disclosure index (0–10)
: Ability of minority
shareholders to sue and hold interested directors liable for
prejudicial related-party transactions; Available legal
remedies (damages, disgorgement of profits, disqualification
from managerial position(s) for one year or more, rescission of
the transaction)
•
Extent of director liability index (0–10)
: Access to internal
corporate documents; Evidence obtainable during trial and
allocation of legal expenses
•
Ease of shareholder suits index (0–10)
Sum of
the extent of disclosure, extent of director liability and ease of
shareholder suits indices
•
Extent of conflict of interest regulation index (0-30):
: Shareholders’ rights
and role in major corporate decisions
•
Extent of shareholder rights index (0-6)
: Governance
safeguards protecting shareholders from undue board control
and entrenchment
•
Extent of ownership and control index (0-7)
: Corporate
transparency on ownership stakes, compensation, audits and
financial prospects
•
Extent of corporate transparency index (0-7)
: Sum
of the
extent of shareholders rights, extent of ownership and control
and extent of corporate transparency indices
•
Extent of shareholder governance index (0–20)
: Sum
of the extent of conflict of interest regulation and extent of
shareholder governance indices
•
Strength of minority investor protection index (0–50)
Case study assumptions
To make the data comparable across economies, a case study uses several assumptions about
the business and the transaction.
- Is a publicly traded corporation listed on the economy’s most important stock exchange.
- Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of
Buyer where permitted, even if this is not specifically required by law.
- Has a supervisory board in economies with a two-tier board system on which Mr. James
appointed 60% of the shareholder-elected members.
- Has not adopted bylaws or articles of association that go beyond the minimum requirements.
Does not follow codes, principles, recommendations or guidelines that are not mandatory.
- Is a manufacturing company with its own distribution network.
The business (Buyer):
- Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to
Buyer’s five-member board.
- Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores.
Seller recently closed a large number of its stores.
- Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Buyer’s
distribution of its food products, a proposal to which Buyer agrees. The price 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 outside the
authority of the company.
- Buyer enters into the transaction. All required approvals are obtained, and all required disclosures
made—that is, the transaction was not entered into fraudulently.
- The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and
directors that approved the transaction.
The transaction involves the following details:
United Kingdom
Doing Business
2020
Page 36
Protecting Minority Investors - United Kingdom
Figure – Protecting Minority in United Kingdom – Score
Score - Protecting Minority Investors
84.0
Figure – Protecting Minority Investors in United Kingdom and comparator economies – Ranking and Score
DB 2020 Protecting Minority Investors Score
0 100
84.0: United Kingdom (Rank: 7)
80.0: Ireland (Rank: 13)
71.6: United States (Rank: 36)
68.2: Regional Average (OECD high income)
68.0: France (Rank: 45)
62.0: Germany (Rank: 61)
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.
Stock exchange information
Stock exchange
London Stock Exchange
Stock exchange URL
http://www.londonstockexchange.com
Listed firms with equity securities
2483
City Covered
London
Indicator
United Kingdom
OECD high income
Best Regulatory 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 (3 Economies)
Ease of shareholder suits index (0-10)
8.0
7.3
10 (Djibouti)
Extent of shareholder rights index (0-6)
6.0
4.7
6 (19 Economies)
Extent of ownership and control index (0-7)
5.0
4.5
7 (9 Economies)
Extent of corporate transparency index (0-7)
6.0
5.7
7 (13 Economies)
United Kingdom
Doing Business
2020
Page 37
Figure – Protecting Minority Investors in United Kingdom and comparator economies – Measure of Quality
the United Kingdom
France
Germany
Ireland
United States
OECD high income
0 5 10 15 20 25 30 35 40 45
Sub-Indicator Score
6 7 10 5 6 8
7 3 8 6 4 6
6 5 5 5 5 5
6 8 9 3 5 9
5 9 7 3 2 9
5.6 5.6 6.6 4.3 4.5 7.4
Extent of corporate transparency index (0-7) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-7)
Extent of shareholder rights index (0-6) Ease of shareholder suits index (0-10)
United Kingdom
Doing Business
2020
Page 38
Details – Protecting Minority Investors in United Kingdom – Measure of Quality
Answer
Score
Extent of conflict of interest regulation index (0-30)
Extent of disclosure index (0-10)
10.0
Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3)
Shareholders
excluding interested
parties
3.0
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 all
material facts
2.0
Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2)
Disclosure on the
transaction and on
the conflict of interest
2.0
Must Buyer immediately disclose the transaction to the public? (0-2)
Disclosure on the
transaction and on
the conflict of interest
2.0
Extent of director liability index (0-10)
7.0
Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused to
Buyer? (0-1)
Yes
1.0
Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2)
Liable if unfair or
prejudicial
2.0
Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2)
Liable if negligent
1.0
Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1)
Yes
1.0
Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1)
Yes
1.0
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 negligently
concluded
1.0
Ease of shareholder suits index (0-10)
8.0
Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents?
(0-1)
Yes
1.0
Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3)
Documents that
directly prove specific
facts in the plaintiff’s
claim
2.0
Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1)
Yes
1.0
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 (0-20)
Extent of shareholder rights index (0-6)
6.0
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 shareholders?
Yes
1.0
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 shares?
Yes
1.0
Do shareholders elect and dismiss the external auditor?
Yes
1.0
Are changes to the rights of a class of shares only possible if the holders of the affected shares approve?
Yes
1.0
United Kingdom
Doing Business
2020
Page 39
Extent of ownership and control index (0-7)
5.0
Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors?
No
0.0
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 of their term?
Yes
1.0
Must the board of directors include a separate audit committee exclusively comprising board members?
Yes
1.0
Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer?
Yes
1.0
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
Extent of corporate transparency index (0-7)
6.0
Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%?
Yes
1.0
Must Buyer disclose information about board members’ primary employment and directorships in other
companies?
Yes
1.0
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 agenda?
Yes
1.0
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
United Kingdom
Doing Business
2020
Page 40
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 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018).
See
the
methodology
for
more
information
.
What the indicators measure
Tax payments for a manufacturing company in 2018 (number
per year adjusted for electronic and joint filing and payment)
Total number of taxes and contributions paid or withheld,
including consumption taxes (value added tax, sales tax or
goods and service tax)
•
Method and frequency of filing and payment
•
Time required to comply with 3 major taxes (hours per year)
Collecting information, computing tax payable
•
Preparing separate tax accounting books, if required
•
Completing tax return, filing with agencies
•
Arranging payment or withholding
•
Total tax and contribution rate (% of commercial profits)
Profit or corporate income tax
•
Social contributions, labor taxes paid by employer
•
Property and property transfer taxes
•
Dividend, capital gains, financial transactions taxes
•
Waste collection, vehicle, road and other taxes
•
Postfiling Index
Time to comply with VAT refund (hours)
•
Time to obtain VAT refund (weeks)
•
Time to comply with a corporate income tax correction (hours)
•
Time to complete a corporate income tax correction (weeks)
•
Case study assumptions
Using a case scenario,
records taxes and mandatory contributions a medium size
company must pay in a year, and measures the administrative burden 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 laws, time taken to comply with the
requirements of postfiling processes and time waiting.
Doing Business
To make data comparable across economies, several assumptions are used:
- TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces
ceramic flowerpots and sells them at retail.
Taxes and mandatory contributions are measured
at all levels of government.
- In June 2018, TaxpayerCo. makes a large capital purchase: the value of the 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 equally expensed per month (875 times income
per capita divided by 12). The 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,
sales and the machine and the tax reporting period is every month. Input VAT will exceed Output
VAT in June 2018.
All taxes and contributions recorded are paid in the
second year of operation (calendar year 2018).
The VAT refund process:
- An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates,
or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a
corporate income tax underpayment. TaxpayerCo. 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 due. TaxpayerCo. submits corrected information after the deadline for submitting the annual
tax return, but within the tax assessment period.
The corporate income tax audit process:
United Kingdom
Doing Business
2020
Page 41
Paying Taxes - United Kingdom
Figure – Paying Taxes in United Kingdom – Score
Payments
90.0
Time
90.0
Total tax and contribution rate
93.8
Postfiling index
71.0
Figure – Paying Taxes in United Kingdom and comparator economies – Ranking and Score
DB 2020 Paying Taxes Score
0 100
94.6: Ireland (Rank: 4)
86.8: United States (Rank: 25)
86.2: United Kingdom (Rank: 27)
84.3: Regional Average (OECD high income)
82.2: Germany (Rank: 46)
79.2: France (Rank: 61)
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.
Indicator
United Kingdom
OECD high income
Best Regulatory Performance
Payments (number per year)
9
10.3
3 (2 Economies)
Time (hours per year)
114
158.8
49 (3 Economies)
Total tax and contribution rate (% of profit)
30.6
39.9
26.1 (33 Economies)
Postfiling index (0-100)
71.0
86.7
None in 2018/19
United Kingdom
Doing Business
2020
Page 42
Figure – Paying Taxes in United Kingdom and comparator economies – Measure of Quality
United
Kingdom
France Germany Ireland United
States
OECD
high
income
0
20
40
60
80
100
120
Index score
71.0
92.4
97.7
93.4
94.0
86.7
United Kingdom
Doing Business
2020
Page 43
Details – Paying Taxes in United Kingdom
Tax or
mandatory
contribution
Payments
(number)
Notes on
Payments
Time (hours)
Statutory tax
rate
Tax base
Total tax and
contribution
rate (% of
profit)
Notes on TTCR
Corporate
income tax
1.0
online
32.0
19%
taxable profit
16.61
Labor tax
1.0
online
57.0
13.8% (floor of
GBP 157 per
week)
gross salaries
10.70
Municipal
business tax
1.0
various
property value
1.49
Pension fund
contributions
1.0
online
2% of qualifying
earnings
gross salaries
1.28
Tax on insurance
contracts
1.0
10%
insurance
premium
0.25
Environmental
tax
1.0
GBP 88.95 per
tonne
weight of active
waste
0.15
Vehicle tax
1.0
various
depending on
weight and size
of vehicle
0.08
Fuel Tax
1.0
included in fuel
price
0.00
Labor tax paid by
the employees
0.0
various rates
gross salaries
0.00
Sales tax
1.0
online
25.0
20%
value added
0.00
not included
Totals
9
114
30.6
United Kingdom
Doing Business
2020
Page 44
Details – Paying Taxes in United Kingdom – Tax by Type
Taxes by type
Answer
Profit tax (% of profit)
16.6
Labor tax and contributions (% of profit)
12.0
Other taxes (% of profit)
2.0
United Kingdom
Doing Business
2020
Page 45
Details – Paying Taxes in United Kingdom – Measure of Quality
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.
Notes:
Answer
Score
Postfiling index (0-100)
71.0
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 VAT refund (weeks)
7.0
92.3
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
91.7
Time to complete a corporate income tax correction (weeks)
34.0
0.0
United Kingdom
Doing Business
2020
Page 46
Trading across Borders
records
the
time
and
cost
associated
with
the
logistical
process
of
exporting
and
importing
goods.
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
2019.
.
Doing Business Doing Business
See
the
methodology
for
more
information
What the indicators measure
Documentary compliance
Obtaining, preparing and submitting documents during
transport, clearance, inspections and port or border handling in
origin economy
•
Obtaining, preparing and submitting documents required by
destination economy and any transit economies
•
Covers all documents required by law and in practice, including
electronic submissions of information
•
Border compliance
Customs clearance and inspections
•
Inspections by other agencies (if applied to more than 20% of
shipments)
•
Handling and inspections that take place at the economy’s port
or border
•
Domestic transport
Loading or unloading of the shipment at the warehouse or
port/border
•
Transport between warehouse and port/border
•
Traffic delays and road police checks while shipment is en
route
•
Case study assumptions
To make the data comparable across economies, a few assumptions are made about the traded
goods and the transactions:
Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as
22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively,
suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and
can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as
24 hours because the actual procedure took 24 hours.
Time:
Insurance cost and informal payments for which no receipt is issued are excluded from the
costs recorded. Costs are reported in U.S. dollars. Contributors 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 experts in international trade logistics and are informed about
exchange rates.
Cost:
- For all 190 economies covered by
, it is assumed a shipment is in a warehouse in
the largest business city of the exporting economy and travels to a warehouse in the largest
business city of the importing economy.
- It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from
its natural import partner—the economy from which it imports the largest value (price times
quantity) of auto parts. It is assumed each economy exports the product of its comparative
advantage (defined by the largest export value) to its natural export partner—the economy that is
the largest purchaser of this product. Shipment value is assumed to be $50,000.
- The mode of transport is the one most widely used for the chosen export or import 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.
Assumptions of the case study:
Doing Business
United Kingdom
Doing Business
2020
Page 47
Trading across Borders - United Kingdom
Figure – Trading across Borders in United Kingdom – Score
Time
to
export:
Border
compliance
85.5
Cost
to
export:
Border
compliance
73.6
Time
to
export:
Documentary
compliance
98.2
Cost
to
export:
Documentary
compliance
93.8
Time
to
import:
Border
compliance
99.3
Cost
to
import:
Border
compliance
100.0
Time
to
import:
Documentary
compliance
99.7
Cost
to
import:
Documentary
compliance
100.0
Figure – Trading across Borders in United Kingdom and comparator economies – Ranking and Score
DB 2020 Trading Across Borders Score
0 100
94.3: Regional Average (OECD high income)
93.8: United Kingdom (Rank: 33)
92.0: United States (Rank: 39)
91.8: Germany (Rank: 42)
87.2: Ireland (Rank: 52)
100: 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.
Indicator
United Kingdom
OECD high income
Best Regulatory Performance
Time to export: Border compliance (hours)
24
12.7
1 (19 Economies)
Cost to export: Border compliance (USD)
280
136.8
0 (19 Economies)
Time to export: Documentary compliance (hours)
4
2.3
1 (26 Economies)
Cost to export: Documentary compliance (USD)
25
33.4
0 (20 Economies)
Time to import: Border compliance (hours)
3
8.5
1 (25 Economies)
Cost to import: Border compliance (USD)
0
98.1
0 (28 Economies)
Time to import: Documentary compliance (hours)
2
3.4
1 (30 Economies)
Cost to import: Documentary compliance (USD)
0
23.5
0 (30 Economies)
United Kingdom
Doing Business
2020
Page 48
Figure – Trading across Borders in United Kingdom – Time and Cost
Export
-
Border
Compliance
Export
-
Documentary
Compliance
Import
-
Border
Compliance
Import
-
Documentary
Compliance
0
5
10
15
20
25
30
Time (hours)
0
50
100
150
200
250
300
Cost (USD)
24
280
4
25
3
0
2
0
Time (hours) Cost (USD)
United Kingdom
Doing Business
2020
Page 49
Details – Trading across Borders in United Kingdom
Characteristics
Export
Import
Product
HS 84 : Nuclear reactors, boilers, machinery and
mechanical appliances; parts thereof
HS 8708: Parts and accessories of motor vehicles
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 by
customs authorities
1.3
75.0
Export: Clearance and inspections required by
agencies other than customs
0.0
0.0
Export: Port or border handling
24.0
205.0
Import: Clearance and inspections required by
customs authorities
0.7
0.0
Import: Clearance and inspections required by
agencies other than customs
0.0
0.0
Import: Port or border handling
3.0
0.0
United Kingdom
Doing Business
2020
Page 50
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
United Kingdom
Doing Business
2020
Page 51
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 2019.
See the methodology for more information
What the indicators measure
Time required to enforce a contract through the courts
(calendar days)
Time to file and serve the case
•
Time for trial and to obtain the judgment
•
Time to enforce the judgment
•
Cost required to enforce a contract through the courts (% of
claim value)
Average attorney fees
•
Court costs
•
Enforcement costs
•
Quality of judicial processes index (0-18)
Court structure and proceedings (-1-5)
•
Case management (0-6)
•
Court automation (0-4)
•
Alternative dispute resolution (0-3)
•
Case study assumptions
The dispute in the case study involves the breach of a sales contract between two 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 enforcement.
To make the data on the time and comparable across economies, several assumptions about the
case are used:
- The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both
located in the economy’s largest business city. For 11 economies the data are also collected for the
second largest business city.
- The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of
adequate quality.
- The value of the dispute is 200% of the income per capita or the equivalent in local currency of
USD 5,000, whichever is greater.
- The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of
income per capita or $5,000 whichever is greater.
- The Seller requests the pretrial attachment of the defendant’s movable assets to secure the
claim.
- The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods
was not adequate.
- The judge decides in favor of the seller; there is no appeal.
- The Seller enforces the judgment through a public sale of the Buyer’s movable assets.
United Kingdom
Doing Business
2020
Page 52
Enforcing Contracts - United Kingdom
Figure – Enforcing Contracts in United Kingdom – Score
Time
74.0
Cost
48.7
Quality of judicial processes index
83.3
Figure – Enforcing Contracts in United Kingdom and comparator economies – Ranking and Score
DB 2020 Enforcing Contracts Score
0 100
74.1: Germany (Rank: 13)
73.5: France (Rank: 16)
73.4: United States (Rank: 17)
68.7: United Kingdom (Rank: 34)
67.8: Regional Average (OECD high income)
57.9: Ireland (Rank: 91)
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.
Standardized Case
Claim value
GBP 60,717
Court name
County Court of England and Wales
City Covered
London
Indicator
United Kingdom
OECD high income
Best Regulatory Performance
Time (days)
437
589.6
120 (Singapore)
Cost (% of claim value)
45.7
21.5
0.1 (Bhutan)
Quality of judicial processes index (0-18)
15.0
11.7
None in 2018/19
United Kingdom
Doing Business
2020
Page 53
Figure – Enforcing Contracts in United Kingdom – Time and Cost
France Germany Ireland OECD
high
income
United
Kingdom
United
States
0
100
200
300
400
500
600
700
Time (days)
0
10
20
30
40
50
Cost (% of claim value)
447
17.4
499
14.4
650
26.9
589.6
21.5
437
45.7
444
30.5
Time (days) Cost (% of claim value)
United Kingdom
Doing Business
2020
Page 54
Figure – Enforcing Contracts in United Kingdom and comparator economies – Measure of Quality
the United Kingdom
France
Germany
Ireland
United States
OECD high income
0 2 4 6 8 10 12 14 16
Sub-Indicator Score
2 5 3.5 4.5
2.5 3 2 4.5
3 1.5 3.5 4.5
2.5 1 0.5 4.5
2.5 4.7 3 4.4
2.5 3.2 2.4 3.6
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
United Kingdom
Doing Business
2020
Page 55
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 case?
Yes
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 granted?
No
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 disposition report; (ii)
clearance rate report; (iii) age of pending cases report; and (iv) single case progress report?
Yes
1.0
4. Is a pretrial conference among the case management techniques used before the competent court?
Yes
1.0
5. Are there any electronic case management tools in place within the competent court for use by judges?
Yes
1.0
6. Are there any electronic case management tools in place within the competent court for use by lawyers?
Yes
1.0
Court automation (0-4)
3.5
1. Can the initial complaint be filed electronically through a dedicated platform within the competent court?
Yes
1.0
2. Is it possible to carry out service of process electronically for claims filed before the competent court?
Yes
1.0
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 general public
through publication in official gazettes, in newspapers or on the internet or court website?
No
4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made
available to the general public through publication in official gazettes, in newspapers or on the internet
or court website?
Yes
Alternative dispute resolution (0-3)
2.0
1. Arbitration
1.5
1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or
section of the applicable code of civil procedure encompassing substantially all its aspects?
Yes
1.b. Are there any commercial disputes—aside from those that deal with public order or public policy—
that cannot be submitted to arbitration?
No
1.c. Are valid arbitration clauses or agreements usually enforced by the courts?
Yes
United Kingdom
Doing Business
2020
Page 56
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 consolidated chapter or
section of the applicable code of civil procedure encompassing substantially all their aspects (for
example, definition, aim and scope of application, desig
No
2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or
conciliation is successful, a refund of court filing fees, income tax credits or the like)?
No
United Kingdom
Doing Business
2020
Page 57
Resolving Insolvency
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,
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 2019.
.
Doing Business
Doing Business
See the methodology for more
information
What the indicators measure
Time required to recover debt (years)
Measured in calendar years
•
Appeals and requests for extension are included
•
Cost required to recover debt (% of debtor’s estate)
Measured as percentage of estate value
•
Court fees
•
Fees of insolvency administrators
•
Lawyers’ fees
•
Assessors’ and auctioneers’ fees
•
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)
•
Case study assumptions
To make the data on the time, cost and outcome comparable across economies, several
assumptions about the business and the case are used:
- A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel
experiences financial difficulties.
- The value of the hotel is 100% of the income per capita or the equivalent in local 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 real estate.
The hotel cannot pay back the loan, but makes enough money to operate otherwise.
In addition,
evaluates the quality of legal framework applicable to judicial
liquidation and reorganization proceedings and the extent to which best insolvency practices have
been implemented in each economy covered.
Doing Business
United Kingdom
Doing Business
2020
Page 58
Resolving Insolvency - United Kingdom
Figure – Resolving Insolvency in United Kingdom – Score
Recovery rate
91.9
Strength of insolvency framework index
68.8
Figure – Resolving Insolvency in United Kingdom and comparator economies – Ranking and Score
DB 2020 Resolving Insolvency Score
0 100
90.5: United States (Rank: 2)
89.8: Germany (Rank: 4)
80.3: United Kingdom (Rank: 14)
79.2: Ireland (Rank: 19)
74.9: Regional Average (OECD high income)
74.6: France (Rank: 26)
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.
Indicator
United Kingdom
OECD high income
Best Regulatory Performance
Recovery rate (cents on the dollar)
85.4
70.2
92.9 (Norway)
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 2018/19
United Kingdom
Doing Business
2020
Page 59
Figure – Resolving Insolvency in United Kingdom – Time and Cost
France Germany Ireland OECD
high
income
United
Kingdom
United
States
0
0.5
1
1.5
2
Time (years)
0
2
4
6
8
10
12
Cost (% of estate)
1.9
9.0
1.2
8.0
0.4
9.0
1.7
9.3
1.0 6.0 1.0
10.0
Time (years) Cost (% of estate)
United Kingdom
Doing Business
2020
Page 60
Figure – Resolving Insolvency in United Kingdom and comparator economies – Measure of Quality
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.”
the United Kingdom
France
Germany
Ireland
United States
OECD high income
0 2 4 6 8 10 12 14 16
Sub-Indicator Score
5 3 2 1
6 3 1 1
6 3 3 3
5 3 1 1.5
6 3 3 3
5.3 2.8 2.1 1.9
Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3)
Figure – Resolving Insolvency in United Kingdom and comparator economies – Recovery Rate
United Kingdom France Germany Ireland United States OECD high income
60
65
70
75
80
85
90
Recovery rate(cents on the dollar)
85.4
74.8
79.8
86.1
81.0
70.2
United Kingdom
Doing Business
2020
Page 61
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 estate)
6.0
Major expenses include remuneration of the administrator (around 3%), auctioneer's fees (around 1% and possible
premium) and attorneys’ fees (around 2%).
Recovery rate
(cents on the dollar)
85.4
United Kingdom
Doing Business
2020
Page 62
Details – Resolving Insolvency in United Kingdom – Measure of Quality
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.”
Note:
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 file for
both liquidation and
reorganization
1.0
Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor?
(a) Yes, a creditor
may file for both
liquidation and
reorganization
1.0
What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a)
Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value
of its assets
(c) Both (a) and (b)
options are available,
but only one of them
needs to be complied
with
1.0
Management of debtor's assets index (0-6)
5.0
Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the
debtor?
No
0.0
Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts?
Yes
1.0
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 commencement of
insolvency proceedings?
Yes
1.0
Does the insolvency framework assign priority to post-commencement credit?
(b) Yes over ordinary
unsecured creditors
but not over secured
creditors
1.0
Reorganization proceedings index (0-3)
1.0
Which creditors vote on the proposed reorganization plan?
(b) Only creditors
whose rights are
affected by the
proposed plan
1.0
Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as
what they would obtain in a liquidation?
No
0.0
Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote
separately and are creditors in the same class treated equally?
No
0.0
Creditor participation index (0-4)
2.0
Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency
representative?
Yes
1.0
Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor?
No
0.0
Does the insolvency framework provide that a creditor has the right to request information from the insolvency
representative?
No
0.0
Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting
creditors' claims?
Yes
1.0
United Kingdom
Doing Business
2020
Page 63
Employing Workers
presents detailed data for the employing workers indicators on the
website (
). The study 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.
Doing Business Doing Business
http://www.doingbusiness.org
The most recent round of data collection was completed in May 2019.
.
See the methodology for more information
What the indicators measure
(i) whether fixed-term contracts are prohibited for permanent
tasks; (ii) maximum cumulative duration of fixed-term contracts;
(iii) length of the maximum probationary period; (iv) minimum
wage;(v) ratio of minimum wage to the average value added per
worker.
Hiring
(i) maximum number of working days allowed per week; (ii)
premiums for work: at night, on a weekly rest day and overtime;
(iii) whether there are restrictions on work at night, work on a
weekly rest day and for overtime work; (iv) length of paid annual
leave.
Working hours
(i) whether redundancy can be basis for terminating workers; (ii)
whether employer needs to notify and/or get approval from third
party to terminate 1 redundant worker and a group of 9 redundant
workers; (iii) whether the law requires employer to reassign or
retrain a worker before making worker redundant; (iv) whether
priority rules apply for redundancies and reemployment.
Redundancy rules
(i) notice period for redundancy dismissal; (ii) severance
payments, and (iii) penalties due when terminating a redundant
worker. Data on the availability of unemployment protection for a
worker with one year of employment is also collected.
Redundancy cost
Case study assumptions
To make the data comparable across economies, several assumptions about the worker and the
business are used.
- Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.
- Is a full-time employee.
- Is not a member of the labor union, unless membership is mandatory.
The worker:
- Is a limited liability company (or the equivalent in the economy).
- Operates a supermarket or grocery store in the economy’s largest business city. For 11
economies the data are also collected for the second largest business city.
- Has 60 employees.
- 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.
- Abides by every law and regulation but does not grant workers more benefits than those
mandated by law, regulation or (if applicable) collective bargaining agreements.
The business:
United Kingdom
Doing Business
2020
Page 64
Employing Workers - United Kingdom
Details – Employing Workers 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)
1400.8
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
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 (weeks of salary)
1.0
Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary)
5.0
Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary)
10.0
Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary)
5.3
Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary)
0.0
Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary)
3.5
United Kingdom
Doing Business
2020
Page 65
Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary)
8.5
Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary)
4.0
Unemployment protection after one year of employment?
Yes
United Kingdom
Doing Business
2020
Page 66
Business Reforms in
United Kingdom
From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by
have been implemented by economies in all regions. The following are reforms implemented since
2008.
Doing Business Doing Business
DB2020
Paying Taxes:
The United Kingdom made paying taxes more difficult by introducing a new pension scheme paid by the employer.
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.
Employing Workers:
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.
Employing Workers:
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.
Employing Workers:
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.
Employing Workers:
The United Kingdom increased mandatory paid annual leave.
DB2009
Employing Workers:
The United Kingdom increased the mandatory paid annual leave.
=
reform making it easier to do business.
= Change making it more difficult to do business.
Doing Business
United Kingdom
Doing Business
2020
Page 67
United Kingdom
Doing Business
2020
Page 68
