Things to consider when starting your business
The excitement of a great idea or service which will be your business, sometimes means that certain essential things are overlooked when it comes to your accounting and tax requirements.
Below are a couple of things to think about at the start:
- What structure is your business going to look like? You can be a soletrader, a partnership, a Limited company or LLP (there are a couple more too). This will have an important effect on the legal identity of the business as well as how it pays tax.
- You know the structure so now you will need to register it with the relevant Government Organisations. Typically these will be HM Revenue and Customs and Companies House (if a Limited or LLP). You want to tell the world what you are up to and the Government wants to hear about it too.
- What level of turnover will the business achieve for you? Trade over a certain level and you will have to be VAT Registered. Registering too late could lead to penalties. There are also VAT schemes which could actually net you a small profit from HMRC.
- Doing it alone or will you need help? Taking on employees brings its own level of red tape and you need to register a PAYE scheme with HMRC. Taking on sub-contractors (ie not direct employees of the business) can save you time but be careful….. HMRC are watching for sub-contractors who are actually employees and applying IR35 legislation which could have a large impact on your business.
- You will need to keep business and personal life separate. Open up a separate bank account for the business. This is important so that it is easy to track what is personal and what is business. This is very important when it comes to a Limited company as you are two separate legal entities.
- Paperwork – love it, hate it, you still need to do it. Choose an accounting system you can use to record all the sales. MATCH Accounting is a Xero Certified Partner and we would recommend checking them out.
- Contact MATCH Accounting for your FREE, initial, no obligation meeting. We can sit down discuss the above and any other issues you may have.
We look forward to hearing about your great business ideas soon.