If you have recently started a new business or are considering doing in the near future, it is very important that you take some time to consider your options and get the detail right from the very beginning.

There are many things to consider from the outset and getting this right and working with the right people will give you more time to do what you do best. 

Selecting a good accountant is probably one of the most important decisions you will make, new businesses need the most support to ensure all tax registrations and deadlines are dealt with in a timely manner.

If you need finance, then having a good business plan and cash flow forecast will be essential.  You should be realistic with your forecasts.

Business Structure

One of the first decisions that you need to make is the structure of the business.  A limited company provides more security and better protection in the event that anything goes wrong.  There are still tax advantages to operating as a limited company but not as much as in the past

A sole trader business is less regulated and therefore, cheaper to run and simpler.  This may be considered as a good starting point, particularly if you’re unsure of whether the business will be viable.

Accounting Systems

The accounting system that you use needs to be one that you are comfortable with.  Cloud packages such as Xero and Quickbooks Online are excellent choices and enable you to work on your finances from any location, they also enable your accountant to access your records easily and help out with the work load if needed.  However, if this isn’t for you then make sure you keep it simple and organised. 

Tax Planning

One of the worst things you can do is start trading and spend all of your income without considering what your tax liabilities may look like.  This is where a good accountant can assist and give you an idea of how much to put to one side for the inevitable tax bill.  There are things that you can do to minimise your tax liabilities such as making pension contributions, purchasing fixed assets at the right time and also in more complex situations you may benefit from Research and Development relief of up to 230% as well as many other tax breaks that you may not have considered.

Registering for VAT and PAYE at the right time is crucial as any late registrations can bring large fines.  If your turnover in the past twelve months has exceeded £85,000 then you must register for VAT.

If you would like to discuss this in more detail, then please contact Gareth Botterill on 01482 862240 or email gareth@botterillco.co.uk

<< Back to Blog