Businesses are born in many ways but there are some common considerations for all start-ups.
Consideration needs to be given as to the how you wish to set up and structure your business. If you are going it alone perhaps a sole trader could be the best route or, if there is more than one person involved, a partnership. Alternatively you may wish to form a limited company which is a separate legal entity to the business owner so may be desirable in some circumstances. There are pros and cons for each type of entity including both commercial and taxation considerations so it is worth seeking professional advice early on.
All businesses will need working capital to fund the day to day operations together with any start up costs and this would usually start with some sort of cash injection. This may be a bank facility, some sort of other loan or even a grant. There may be tax implications to consider depending on the type and nature of the ‘debt’. Another consideration is how best to fund any capital expenditure required.
This is of importance to all businesses and will vary depending on type and sector. All businesses however will need to register with H M Revenue & Customs within the appropriate timescale. VAT registration will also need to be considered if the business will make ‘taxable supplies’ in the next 12 months that exceed the VAT registration threshold, currently £85,000.
If the business is going to employ people, including salaried directors in a limited company, it will need to register with HM Revenue & Customs for a PAYE scheme. Regulations surrounding work place pensions will also need to be adhered to as noncompliance can result in significant financial penalties.
All businesses will need to maintain adequate accounting records and, depending on turnover levels, these will need to be held in a digital form from as early as April 2020. Choosing the right accounting package is therefore important as getting it set up right from the beginning will almost certainly save time in the long run.
There is much to think about when starting a business and a local accountancy firm will be able to guide you through these having seen it many times before.
Want to know more?
Get in touch with your local W&P branch https://www.whitingsllp.co.uk/about-us/contact-us/