As an accountant, I work with lots of different businesses on a day to day basis but what every business has in common is the fact that at some point they were all a start up (including myself). Starting out in business is not only a huge gamble but a minefield of red tape and legalities to wade through, let alone all the different hats a business owner has to wear, particularly when starting out; we need to be marketers, sales people, administrators, bookkeepers, the list goes on. The most common questions I get asked by new business owners is: ‘What do I have to do?; Who do I tell?; What can I claim?; How does it all work?’
I have previously addressed ‘What can I claim?’ in a 3 part post on Recordkeeping – What you need to know which you can read by clicking on the blue link. Today, I want to address the What do I have to do? and Who do I have to tell? questions.
Let’s start with the easy question first: Who do I have to tell? The answer to this will partly depend on whether you are a sole trader/partnership or a limited company.
As a sole trader you will need to register with HMRC and tell them of your self employment. Once you register with HMRC they will give you a UTR (Unique Tax Reference) which is very important as you will need this number to prepare and submit your personal tax return. You can notify HMRC here.
As a limited company you will need to register your company name with Companies House and register the new company for Corporation Tax with HMRC. Once you get your company number and authentication code from Companies House, you will need these for online filing, HMRC will write to you with your Corporation Tax reference which you will need for submitting you Corporation Tax Return.
Other taxes etc you may need to register for depends on your business but can include, PAYE (if you run a payroll scheme), VAT, CIS (Construction Industry Scheme) and opening a separate bank account (always advisable).
What do I have to do?
As a start up, the list of things to do is seemingly endless and every time you speak to someone else, the list grows and grows. You get to the point where you think, What am I doing, why am I putting myself through this?; well, I did anyway! So, hopefully to help, here is my list of 8 Things To Do on Start Up:
- Register your business with HMRC and/or Companies House.
- Set up a separate bank account for your business. Top Tip: as a sole trader or partnership, this can simply be a personal bank account, it does not have to be a business one, save yourself the banking fees of a business account if you can.
- Register for any additional taxes (CIS, PAYE, VAT etc)
- Get your insurances in place, (business insurance, tell your home insurance if working from home, public liability etc)
- Get a web presence and social media accounts in place.
- Think about your bookkeeping and start keeping track now, do you need software or will a spreadsheet suffice? What expenses will you have, what are you able to claim etc. Ask for advice if you need it.
- Do you need contracts sorting out? Customer contracts or supplier contracts? Terms and Conditions. Get professional advice on these, they are very important that you are covered. I recommend Ravi at www.contracts4you.co.uk
- Finally and most importantly, be positive, work hard and try to enjoy being your own boss.
As ever, if you want or need additional advice or help, please email firstname.lastname@example.org or visit the website on www.redgeraniumco.co.uk