BUSINESS TAX
Starting a business Starting a business is an exciting and challenging experience and one which also carries a fair degree of risk. You will need to make decisions that could be critical to the long-term success of the enterprise, such things as the type of business and its attributes; your target market and competition; profit potential and how you will extract those profits; the rate of business growth; and the impact of running the business on your personal life. At some point, you’ll also need to consider how you will exit the business when the time comes. Writing a business plan – One of the first things you need to consider is your business plan. This is not only for the benefit of potential investors but to help you stay on the right course in the short, medium and long-term. It should include: the business structure that best meets your needs; your intended funding sources; tax-efficient borrowings; whether a PAYE scheme is necessary; and whether the business should be VAT registered. Choosing your business structure – Deciding on the most appropriate structure for your business isn’t necessarily straightforward. Sole traders, partnerships, limited companies and limited liability partnerships all have their own pros and cons, with different implications for control, perception, support and costs. For example, careful consideration is needed regarding
Registering with HMRC – When you start a business, it is important to inform HMRC of your new self- employed status as soon as possible. If and when you take on employees you need to register for and set up a PAYE scheme and accept all the responsibilities and obligations that go with it, including compliance with Real Time Information reporting (and remember for this purpose you will most likely be an employee of your limited company, if you incorporate). You will also have to comply with the pensions auto-enrolment obligations, although exemptions apply to director-
personal ownership of any freehold property on incorporation. Deciding on a year end – It’s also important to choose a year end that suits your business. Is there a time of year when it will be more convenient to close off your accounting records, ready for us? What time of year would be best for stock-taking? Is your trading seasonal? Speak to us for advice about choosing your year end, especially with the forthcoming changes in connection with basis period reform.
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Business Tax
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