Starting Your Own Business

Starting Your Business

If you are accustomed to working in employment, where your salary appears in your bank account each month, then starting your own business can be a little scary.

It doesn’t have to be though as help is on hand to ensure you get everything in order.

At AJN Accountants we fully know the issues you may face when starting your own business. That is why our advice is tailored to help you avoid these pitfalls and get started on the right foot.

There are a few important factors you can consider up-front.

GETTING THE TRADING STRUCTURE RIGHT

The first element to setting up your own business is deciding which business structure is best for you; Sole Trader, Partnership or Limited Company?

Small business owners, including freelancers and locums often find it simpler and more convenient in the early years to be self-employed.

Contractors, on the other hand, often choose to set up a limited company from the start, particularly if their contract value is above the higher rate tax threshold.

Getting the trading structure right is essential when setting up your business.

REGISTERING A SMALL BUSINESS FOR VAT AND TAX

Not all businesses need to register for VAT, but all individuals when starting a small business do need to register for tax.

There are a number of forms that can be completed to tell the necessary authorities that there has been a change in your situation.

CREATING A SMALL BUSINESS PLAN

Depending on the nature of your business will depend if it is necessary to prepare a small business plan.

Either way, planning ahead really helps to start your business in the right way.

SETTING UP YOUR ONLINE ACCOUNTING SOFTWARE

With Small Business Accounting Software, recording your income and expenses need not be a chore. Intuitive, electronic software can now do most of the hard work for you.

It is best practice to set this up from the start of your business. This way you can get off to the best beginning.

KNOW YOUR FIRST DEADLINES

When starting your own business it is good to know your first deadlines, as they can creep up if you don’t plan properly.

Speak with a professional tax accountant to help you organise your year ahead.

SETTING UP A COMPANY

When the time is right, setting up a company could be beneficial for tax purposes.

The process requires some careful tax planning to ensure that you don’t miss any tricks to save on tax.

At AJN Accountants we will initially prepare a calculation to ensure the timing is right for you to set up a new company.

We can then help you to execute the set up, including all the form filling and deciding important things like your salary and dividend mix.

When setting up a company, remember:

It can be complex, so take advice
Timing is crucial to your decision
Getting something wrong in the set up can cost you dearly in the future
There is important paperwork that needs completion
Managing the accounts and tax of a limited company is more complex than a sole trader, or partnership
Tax rates are low, so trading as a limited company can be highly beneficial for saving tax, when done right
Extraction of profits between salary and dividends needs to be carefully considered, and planned