Beginner’s Guide on Starting a Hotel Business in the United Kingdom
We’re all aware that the hospitality sector experienced unprecedented turbulence due to the Covid-19 pandemic. However, the world is anticipating better times ahead with the vaccine and industry’s measures to curb the situation. With the progressive return to normalcy, any entrepreneur with the ambition of getting into the hotel business can surely do so.
Here’s a guide to company registration on starting a hotel business in the United Kingdom.
Industry Practice to Know Before Starting a Hotel Business in the United Kingdom
When you think about a hotel business, the first thing that comes to your mind is accommodation. Each room can vary in size from one bed to multiple beds, even like a hostel. Furthermore, there may be luxury rooms and add-on services like conference facilities, spa amenities, or restaurants.
Having some form of training and experience in the hospitality market is beneficial to venture into a hotel business. In return, you’ll be able to offer a high-quality standard of services. Within the UK, we have the Institute of Hospitality that acts as the industry’s umbrella. The institute offers management guides and training programmes for those aspiring to start a hotel business in the United Kingdom.
If you plan to invest in the hotel industry, you must never compromise on quality whatsoever. Your guests will always look for good food and the standards of the rooms. Again, by virtue of the hotel business being competitive, every hotel strives to be the best corporate service provider as people’s expectations are pretty high.
Under the Business Names Act, hoteliers must present a notice indicating the owner’s name is not similar to the business name. In the event you’re providing advertising literature and marketing pamphlets, ensure the pricing is consistent. It is inappropriate to raise the price after quoting it to a potential guest (and then failing to inform clients).
When it comes to the booking process for guests, ensure you comply with both the Credit Card Order 1990 and the Data Protection Act 1998. The hotelier must always protect the guest’s privacy, specifically personal data held on a computer.
Business Registration Process
Now when it comes to starting any form of business, you should put certain factors into consideration. The regulatory frameworks, type of business structure, and the licenses and permits, among others, are all important.
The Structure/Type of Business
Before starting a hotel business in the United Kingdom, you need to decide which type of structure to go for. This can either be a Partnership or a Limited company, or an Unlimited Company, among others. The structure you choose has different regulations governing its formation. Before you register your hotel business, ensure you make some inquiries on the best option for you. The right business networking provides you with the actual preview of the best business location and initial capital.
Remember, it’s essential to keep costs at lower levels by spending on the necessary things as a beginner. In the United Kingdom, you can opt for the Small Enterprise Investment Scheme (SEIS) connected with startup businesses. Foreigners with plans of starting a hotel business in the United Kingdom must ensure they are eligible to do so. This will include having an entrepreneur visa or investor visa to operate in the UK. If you’re a non-EU/EFTA national, you can apply for a Tier 1 work visa. The process may take at least 30 days to be completed. There is the option of a Tier 2 work visa, which is valid for five years.
Selecting the Hotel Business Mame
Based on the Company Act, every company must have a distinct name that reflects the business nature. According to the Act, you should register with the company registrar if you’re starting a Limited company. Likewise, you can register your business as a trademark to avoid any possibility of someone else registering under your name.
Securing the Right Licenses and Permits
Another important aspect is securing the required licenses and permits before starting operation. If you’re in the hotel business, you’ll need an alcohol license, food permits, and business operation licenses. It will help if you oblige to the Safety and Welfare Act within the premise. The general permits might vary from cities or jurisdiction, which you must first find out before registration.
Registering Your Hotel Business
After the approval of the business name, you can register with Companies House. Here you’ll provide details about shares issued to obtain the SIC code. You’ll also require providing details of directors and the shareholders. A Memorandum and Articles of Association explains the rules and regulations of the company’s internal affairs, which you must provide. If it’s a Limited Liability Partnership (LLP), the hotelier should provide a written agreement to establish the business control. For company incorporation, we have Form 10, a statement of the first directors, secretary, and registered office. In the form, ensure you give details of the company’s registered office and the names and addresses of the directors.
Form 12- is a declaration of compliance with the requirements of the Companies Act. The registration process may not be complete without registering with the HM Revenue and Customs department. You’re required to contact your local HMRC office to notify them that your company exists. Failure to do that, and you are liable for a penalty. As a company, you’re liable to pay corporate tax and file your returns by the statutory filing date. The filing dates are usually 12 months after the end of the accounting period.
Recruiting Staffs for Your Business
To operate your hotel business, you need staff to help you carry out your day-to-day activities. Having employees that have the right skills and experience is important. In the UK, employees must be automatically registered into the pension scheme by their employer. Likewise, the employer must register the staff with HMRC online.
The employment laws require you to have a payroll software system. You’ll receive a notification from HMRC with the employer’s PAYE reference number and Accounts Office reference from the system. If you plan to hire foreign workers, it is your responsibility to secure valid work passes for your staff.
If you feel that the registration process is cumbersome, you can contact 3E Accounting.
Licences and Permits Needed
Several laws are considered when it comes to starting a hotel business in the United Kingdom. These range from licensing rules to food hygiene and fire regulations. Therefore, when starting up a hotel, ensure you purchase fire-retardant furniture that complies with the Furniture and Furnishings Safety Regulations 1988.
As part of safety precautions, the installation of fire extinguishers, fire exit signs, checking fire exits, and performing regular fire drills is a necessity. In return, it limits the ability of potential fire to spread whenever it happens.
Additionally, the owners should oblige to the Gas Safety Regulations 1994, which protects guests’ safety, health, and welfare. According to the Health and Safety at Work Act 1974, each hotelier needs to take cognizance of substances that may cause injury or illness to their workers. This means that staff should have proper protective clothing that will help them to handle harmful substances. These may include cleaning fluids like chemical-based bleach for general maintenance.
The Act protects staff from working excessive hours or unsuitable shift patterns, resulting in an accident from fatigue. The Working Time Regulations 1998 supplements which specific case dictates rest breaks, shift patterns, annual leave, and working hours for all employees.
In this age of ligation and blame culture and the threat of being sued, hotel insurance, particularly in public liability insurance, is essential. The Employer’s Liability (Compulsory Insurance) Act 1969 requires the owner to display the insurance certificate within the hotel.
You have legal responsibilities to ensure that food is prepared hygienically. Poor hygiene and improper food management can result in food poisoning. This is one of the most serious threats to your business. If you have no previous experience in this area, you can seek formal training courses.
Likewise, when you’re offering guests alcohol alongside food, it’s important to adhere to the Licensing Act 1964. The Act dictates serving alcohol, such as the cleanliness of optics, glasses, and pipes alongside unit measures. If your hotel plans to serve alcohol during mealtimes, you’ll need a residential and restaurant licence known as a Function’s Licence.