Why you should talk to an accountant before you start your business
We know that starting a business can be massive step. Whether it’s leaving an employment to go out on your own, starting a side project for some extra earnings or pursuing your passion its important to get the right advice from the outset to avoid costly mistakes and ensure you are complaint.
Sole trader or limited company?
Starting a business does not need to mean starting a company, but it may be advisable to use a company as the vehicle from the outset. Companies are more expensive to run, and will normally require a payroll scheme even for a one director company. The advantages of being a company can be limited liability, it can give the impression of being a more “serious” venture, and in some cases tax savings. Getting a company name is not the same as getting a trademark. Sole trades (or partnerships) are simpler and any early losses can be offset against recent tax paid on employment.
Businesses who turnover £85,000 in any 12 month period must VAT register, however if your business will supply commercial VAT registered customers then voluntary registration is often advisable. In this case VAT is added to your sales and you can reclaim VAT on fuel, materials, equipment, professional fees and other costs. If you are to be VAT registered will you be flat rate or standard, cash or accounting basis
It is important to keep records of all sales and costs, we can advise you on the various software subscriptions available, and we can help with Sage, Xero, Quickbooks and other options.
Shareholders in new companies will want to consider shareholder agreements and possibly cross life cover. Partnerships may need a partnership agreement. We can discuss these aspects and refer you for legal advice if necessary.
Employees and subcontractors
If you are working in the construction industry you may act as a contractor or subcontractor and may need to be registered under CIS and make returns. If you will have employees you will need a payroll scheme and our payroll department can deal with all your payroll and employee pension requirements.
Cashflow and business plans
If you will require funding to expand your new business then the bank may require a business plan which we can help with.
Filing and registration requirements
We can help you understand what is required in terms of registering:
- as self employed
- as a CIS subcontractor/contractor
- for a tax return
- a company at companies house
- for corporation tax
- for VAT
- for PAYE
We deal with all taxes and help complete VAT, personal and company tax returns.
There are often ways we can help you claim allowable expenses or set up your business to minimise tax. Common areas we help with are subsistence, travel expenses and use of home as office. Giving a spouse or partner a share in a business may utilise your tax free allowances as a family better.
Speak to one of our directors today about all of the above, we have advised hundreds of businesses, free initial meeting.