At Maz & Co Accountants we welcome start-up businesses to come and talk to us. We can help you from day one to find the best methods of bookkeeping, the best tax saving methods. Cash flow is one of the most important factors for any start up business.
Are you going to launch your business as a sole trader, partnership or limited company? Some of the criteria that should be considered are commercial risk, expected profitability, financing, use of cars for company purposes, and of course tax planning preparation and VAT considerations.
Have you set out your business objectives in writing? Can you demonstrate qualified experience in the type of business that you want to launch? How are you going to finance the company? What are your expectations for sales, profitability and investment in assets? Have you consolidated all this information in a formal business plan?
Banks and Finance companies
Identify your "friendly bank manager" and make sure that you are well prepared for the critical first meeting, this can be one of the most important contacts for your business.
VAT (Value Added Tax)
You should decide whether it is in your best interests to register for VAT from commencement, at some future date, or not at all if your trade is outside the scope of VAT. The decision you make on this point will affect both profitability and cash flow of your fledgling business.
Tax Traps to avoid!
• Tax Penalties
As soon as you have set a start date, ensure that you notify HMRC
of your intention to commence trading. Self employed businesses
face a fine of £100 if this is not done within 3 months of start up,
limited companies face an even stiffer penalty of £300!
• VAT Penalties
Do not represent yourself as registered for VAT if you are not, this
is considered fraud. If you do register for VAT submit your returns
and pay your dues on time to avoid interest and surcharges.
• Missing Invoices
Always obtain a proper invoice for any business purchase, a VAT
invoice if you are registered for VAT, otherwise you may find that
your claim for tax relief will be denied, as will your VAT reclaim.
• Company Car
Whether you are self employed or a limited company planning for the
use of a car in your business needs to be carefully thought through .
Self employed persons will need to keep a log of business mileage to
backup any claim for tax relief. Limited company owners will need
to compare the cost of running a car either inside or outside the
company - potentially high personal tax charges may be payable if
this cost comparison exercise is not undertaken.
Often businesses have failed because they have not adequately planned their business start-up. It is much easier to avoid making mistakes, and to maximize your future chances of success, if this pre-launch planning is undertaken with professional help. As with most new ventures it is not what you know that catches you out, but what you don't know!
We could assist you with the preparation of a business plan, and to help you choose the best business structure for your business. We can also help you with raising finance for all aspects of your business.