STARTING A NEW BUSINESS

1. REGISTERING YOUR BUSINESS

There are 3 ways to register your business in the UK: as a limited company, a sole trader or a partnership.

With over 3.6 million limited companies in the UK, setting up is easy, quick and efficient. Most entrepreneurs opt to register as a ‘limited by shares’, giving you the option to keep any profits made after paying tax. If you set up as a sole trader, you run your own business as an individual and are self-employed. It is your responsibility to keep records of your company’s expenses and to send a Self Assessment tax return each year. Setting up as a partnership will mean you and your partner(s) share responsibility for any losses and will pay tax on their share of the business.

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2. VAT REQUIREMENTS

If your business’ turnover is over £85,000 a year, you must register your business for VAT with HMRC.

If you register for VAT, it is your responsibility to charge the right amount of VAT, submit VAT returns, pay VAT due to HMRC and keep VAT records. Most VAT registered businesses are also required to follow the rules for ‘Making Tax Digital for VAT’. Get in touch with us to see if your business is required to comply with these rules.

3. EMPLOYEE REQUIREMENTS

If you plan on hiring individuals as employees of your company, you must be aware of their employment rights.

Employees must be auto-enrolled into a pension scheme with employer contributions – as of April 2019 the total minimum contribution is 8% (3% employer, 5% employee). You must also pay 13.8% of your employees’ salary towards their National Insurance. PAYE must be operated as part of your payroll and you are required to report your employees’ Income Tax and National Insurance payments and deductions to HMRC on or before each pay day.

4. FILING YOUR ACCOUNTS AND TAX RETURNS

If you set up a limited company, at the end of the financial year you must ensure you prepare a company tax return and statutory accounts.

Your company is required to file a company tax return if given a notice from HMRC to do so. Your company tax return can be prepared by an accountant or yourself, but it must be filed within 12 month after the end of the accounting period it covers or a penalty will be issued. Statutory, or year end accounts must be prepared at the end of the company’s financial year. Statutory accounts must include a balance sheet, a profit and loss account, a director’s report (unless you’re a micro-entity) and notes about the accounts. Depending on the size of your company, you might be required to include an auditor’s report.

ABOUT JEFFREYS HENRY LLP

Based in London, Jeffreys Henry LLP is a top 100, award winning provider of accountancy, audit, tax and advisory services.

OUR CLIENTS ARE MOTIVATED TO ACHIEVE THEIR GOALS

Our clients include private individuals, entrepreneurs and businesses that are motivated and driven to achieve their goals. Here is a small but representative selection of such clients: