Making a solid start
Your Tax Office is always ready and willing to help start-up businesses so come and talk to us. It is always better to get started with the right tax structure and accounting practices rather than try to change it later which can be expensive.
Have you considered whether you will trade as a sole trader, partnership or limited company? This is an important decision. Other considerations should be the commercial risk of your business, profitability, financing, use of cars for company purposes, and of course tax planning preparation and VAT.
A business plan is an integral part of setting up a new business. You need to set out your business objectives and demonstrate your experience in the type of business that you want to run. Where is the money coming from to finance the company? What are your expectations for sales and profitability? What will you need to buy or hire to run your business.
Banking and Finance
Identify the bank you wish to use for your day-to-day banking and that which is most suited to your needs should you need other services such as leasing, mortgages, loans or foreign currency. We can advise you on the most suitable for your business.
VAT (Value Added Tax)
You will need to decide whether it is in your best interests to register for VAT from commencement, at some future date, or not at all if your trade is outside the scope of VAT. The decision you make on this point will affect both profitability and cashflow of your new business. Please look at our VAT section for more information.
Beware of the Tax Traps!
Tax Penalties - as soon as you have set a date to start your new business ensure that you notify the Inland Revenue of your intention to commence trading. Self employed businesses face a fine of £100 if this is not done within 3 months of start up, limited companies face an even stiffer penalty of £300.
VAT Penalties - do not represent yourself as registered for VAT if you are not, this is considered fraud. If you do register for VAT submit your returns and pay your dues on time to avoid interest and surcharges.
Missing Invoices - always obtain a proper invoice for any business purchase, a VAT invoice if you are registered for VAT, otherwise you may find that your claim for tax relief will be denied, as will your VAT reclaim.
Company Car - whether you are self employed or a limited company planning for the use of a car in your business needs to be thought through carefully. Self employed persons will need to keep a log of business mileage to backup any claim for tax relief. Limited company owners will need to compare the cost of running a car either inside or outside the company - potentially high personal tax charges may be payable if this cost comparison exercise is not undertaken.
We would be delighted to assist with the preparation of a business plan, and to help you choose the best business structure for your business. We can also help you with raising finance for all aspects of your business.
Need advice? Call us today on 0845 867 9294 or fill out our contact form.