A Guide to Start-Up a Business - Starting Business in the UK
: So you want to start your own business, but not quite sure where to begin? Maybe you have a fledgling business but need help to move it forward. Coddan CPM is designed to provide information and guidance for those starting new businesses, and those developing foreign businesses within the United Kingdom. We can help you set-up as a self-employed sole trader or establish a company and get it running. We provide all the services you need to start up a business. In addition to a fast online company formation service, we also have ready-made companies available, and can provide invaluable assistance with accounting, tax planning, tax filing, and corporate services. We also broker international and UK bank accounts for our overseas clients, and provide registered office and virtual office services. You should think carefully about which structure suits your particular circumstances before making a decision. Choosing the wrong structure could expose you to unnecessary costs and risks, while failure to address certain practical issues may result in you falling out with your business partners or associates. Having said that, the status of sole trader suits many professions where starting up does not require major investment, and where a skill - such as carpentry, bricklaying or freelance services - is just as important as business acumen. It will not stop you from employing people when you start to get busy, but it will allow you to keep a tight grip on your business and to run it as you wish.
Starting Your Own Business - Register with HM Revenue & Customs
: Thinking of starting a business? Let Coddan helps you become a successful entrepreneur. We can help if you need information and guidance in any of the following areas: how to start your own business in the United Kingdom, how to register a business name, how to get your business up and running, how to select the best business form, how to register a new company, and how to start-up a small business. If you need a UK business limited company formation specialist offering prompt service and expert advice, who can help you to set-up a small business in England, Scotland or Ireland, or help you to register your business in Edinburgh, London, Liverpool, Belfast or Dublin, or if you have an idea for a business and want to start a company now, then we can help you.
How to Register Self Employed Business: Register a New Business if You Intend to Start a Limited Company
: Many people start a small business in order to enjoy the perceived rewards of freedom and independence. This is understandable because owning your own business can offer you the opportunity to experience freedom: the freedom to use your own ideas; the freedom to be the boss; the freedom not to be fired; and the freedom to earn as much as you want. The reality of small business ownership can be quite different. Many small business owners will tell you that they work more hours than when they worked for someone else. Planning and starting a business is a little like climbing a mountain. It is a perilous journey, fraught with unknown dangers and influences outside your control. However, if you keep your goal in sight and plan very, very carefully, getting to the top can be a most rewarding experience.
Set Up & Register as a Self Employed - Becoming a Sole-Trader
: If you are self-employed, you are responsible for paying your own tax and National Insurance contributions. You will need to keep business records and details of your income so you can fill in an annual self-assessment tax return. You may also need to register for VAT. Once you are registered as self-employed, you will receive a self-assessment tax return to complete each year so that you can provide details of your earnings and any other income you get during the tax year (6 April to 5 April). This information is used to work out how much Income tax you have to pay. If you are self-employed you normally have to pay Class 2 National Insurance contributions. If your annual profits are over a certain amount, you also pay Class 4 contributions. In certain circumstances, you may be exempt from paying.
First Steps to Register as a Self-Employed, or Incorporate as a Limited Company
: When first setting up a business there are many issues to consider, not least of all, whether to register as a company or not. Starting and managing a business takes motivation, desire, and talent. It also takes research and planning. Like a chess game, success in a small business starts with decisive and correct opening moves. In addition, although initial mistakes are not fatal, it takes skill, discipline, and hard work to regain the advantage. If you have an idea for a business, are setting up a business, or have started your own business recently, bookmark this site now. You can also register as a self-employed, and a sole trader private limited company with us, and as well as a limited liability partnership, you can see a description of our incorporation packages, and compare them, by choosing from the appropriate list below. If you will see something unclear in our packages' description, please do not hesitate to contact us for more information.
Further information
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Starting a business online and business entity registrations in England, Wales, Scotland and Ireland, Coddan – fast and quick limited company registration & business starting-up incorporating agent in United Kingdom! You can now form and register self-employed using our sole-trader establishment agent, we offer online incorporation London, setting business corporation United Kingdom, starting-up company in Ireland, British and English LTD registrations services: sole proprietorship limited liability company. Check business establishment costs, starting Irish company, LTD incorporation London, Scottish, Edinburgh, Glasgow, British company creation package, business name generator helps generate random name for new business.
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Learn about sole trader incorporation & how to establish online private business registration. Whether you incorporate private family business online, open corporation England or form a self-employed, we can help you understand the self-employed incorporation process for filing, business registration names, and business fast formation. In addition to British limited liability company formation, sole-trader, provision of virtual office in London, mail-forwarding, fax-forwarding, cheap apostille, provision of a business address services and company searches for sole traders and limited companies. Information to help open a bank account for a limited company, or opening a banking account for the self-employed in the UK, grow or manage a small business, ready-made companies with VAT registered and companies formation services.
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We provide the full range of public notary services for private and commercial clients in London and internationally: what is a limited sole-trading company formation, forming a self-employed limited companies. Our complete range of corporate services cover self-trading registration through to its restoration or dissolution, and we also cover information and support, registrar private limited liability company. How to choose the best sole-trader business name and how to form a self-employed partnership, limited liability company (LLC) is a business structure allowed by state statute. Self-employers registration are popular because, similar to a corporation - series LLC is a special form of a limited liability company that allows a single LLC: company registration number search, web-check companies house uk, companies house filing deadlines, companies house late filing and companies house filing fees.
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Becoming and registering as a sole trader: the administration requirements of a limited company are greater than those of a sole-trader and it may be worth considering using an outsourced company secretary service as the official forms required by Companies House are not always easy to locate, or easy to understand – HMRC sole trader registrations, establish business organisation sole traders. You are also almost certain to need an accountant to prepare your company accounts and your tax return, and because they are more complex to prepare, their charges are likely to be higher than those incurred for sole trader accounts: sole trader name registration, register a self employed, limited liability company formation, sole trader advantages.
You will need to Register as self employed and get your UTR Number If you are registering to become self employed by phone or online, associated with contracting in the form of a personal service company - private limited company advantages, setting up a private limited company. The umbrella company normally issues invoices on the contractor behalf, sole trader registration number, calculates tax and National Insurance contributions, and pays the contractor their net pay directly into their personal bank account. Completing and filing statutory forms: sole trader tax advantages here the company secretary duties would extend to ensuring that, for example: the annual accounts filings are filed on time at Companies House; the annual return is completed and filed - sole trader or limited company.
If so, you will typically also need a Unique Taxpayers Reference (UTR) number. Your UTR number is provided to you by HM Revenue and Customs (HMRC) and is unique to you. It is the reference number you use for your tax affairs and makes it easy for HMRC to identify you. UTR numbers are most commonly needed if you are self-employed. This is because the self-employed make up by far the majority of the people who have to complete a self-assessment tax return. However, you may also need a UTR number if you self assess for another reason. A UTR is a, unique number provided by the Inland Revenue so that you can complete your tax return. It is used to complete your tax return and is often used for correspondence with the Inland Revenue.
It has ten digits and you will find it on your Tax Return, your Notice to File a Tax Return or on your Statement of Account. It may also be on other documents. If you just arrived into the United Kingdom for a new job with a company or as a self employed, you many need some help and advice in dealing with your taxes, from self assessments, opening a bank account, UTR number, National Insurance and much more issues you may not be familiar with.
When you become self-employed you must register HM Revenue & Customs HMRC so that they can set up the right tax and National Insurance records for you. Once you have registered, HMRC will send you a Unique Taxpayer Reference number and you will then complete a Self Assessment tax return each year.
Even if you already complete a Self Assessment tax return, you can still complete a Self Assessment registration form to tell HMRC about your self-employment. It is best if you register as soon as you become self-employed. You must register at the latest by 5 October after the end of the tax year for which you need a tax return. The tax year runs from 6 April one year to 5 April the next. Therefore, if, for example, you have tax to pay on your business profits for the 2010-11 tax years, you need to let HMRC know by 5 October 2011. Easy setting-up a sole trader company in the UK or electronic register one member company in England, Scotland, Wales or Ireland, forming new business and business establishment agency, self employed restoration and dissolution services.
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Setting up as a self-employed sole trader is the simplest and quickest way to start a one-person business. This is our most popular package with UK residents, who has a valid permission to live and work in the United Kingdom, and includes:
An initial consultation on registration as a self employed;
A practical advice and guidance to help you get your business off the ground;
Our legal and initiation fee for registration is included in the price of this package;
The registration of your self as self employed in 2-3 weeks;
The preparation and submission of the appropriate forms to Inland Revenue to obtain National Insurance Number and PAYE registration (extra fees for using these services will apply);
The provision of specialised account books, seals and other stationeries (extra fees for using these services will apply);
The registration for VAT if you expect to have turnover of more than £73,000 a year (extra fee for using this service will apply).
Please note: if you run a business from home, you may have to pay business rates for the part of your home that you use for your business. Please contact us for further details.
Incorporate as a Company
£ 32.00
No Annual Charges
This is our most popular package with UK residents, and includes: -
The registration of your company from scratch using your own registered office address, and appoint your own candidates to the roles of director, secretary (if needed), and shareholder;
The standard capital on formation is £1.00, this is divided into 1.00 ordinary share valued at £1.00 (a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The following documents, which need to be printed and signed, will be emailed to you upon formation of your company: -
A certificate of incorporation (requires PDF file reader);
The memorandum & articles of association (requires MS-Word file reader);
The first meeting of the board of directors (requires MS-Word file reader);
Share certificates and a company register (requires MS-Word file reader).
Register as an LLP
£ 125.00
No Annual Charges
This is our most popular package with UK residents, and includes: -
The registration of your LLP from scratch using your own registered office address, and appoint your own candidates to the roles of members and designated members;
The standard capital on formation is £1,000, this is divided into 1,000 membership certificates valued at £1.00 each (it is not required to have all of the certificates issued, but a minimum of two certificates must be issued);
The formation of a limited liability partnership usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for LLP incorporation is included in the price of this package;
The following documents, which need to be printed and signed, will be emailed to you upon incorporation of your LLP: -
A certificate of registration (requires PDF file reader);
The partnership agreement (requires MS-Word file reader);
The first meeting of the board of members (requires MS-Word file reader);
Membership certificates and an LLP register.
Business Start-Up: Self Employed
When you start working for yourself, you will need to register as self-employed with the Inland Revenue.
Once you are registered as self-employed, you will be a self assessment taxpayer.
You can trade under your own name, e.g. John Doe, or use another business name, e.g. AAA Business Marketing (don't forget to check that no-one else is using the name).
If you are self-employed, you are responsible for paying your own tax and national insurance contributions.
You will need to keep business records and details of your income so you can fill in an annual tax return.
If your business turnover is more than the VAT threshold (£73,000) you will normally have to register for VAT.
You pay Class 2 National Insurance contributions at a flat rate of £2.50 a week. However, if your earnings are below £5,315 per year (2011-12) you might not need to pay.
Yhe amount of Class 4 National Insurance contributions you have to pay for any tax year is based on your profits for that year. You pay 9 per cent on annual profits between £7,225 and £42,475 (2011-12) and 2 per cent on any profit over that amount.
Bear in mind that Class 2 NICs do not count towards the additional state pension, statutory sick pay or jobseeker's allowance.
With some types of business, you need to get a licence before you can start working.
Key dates for self-employed tax: -
30 September: sending in your paper tax return if you want HMRC to work out how much tax you owe.
31 January: sending in your tax return to avoid a penalty.
31 January and the following 31 July: tax payments.
Business Start-Up: Private Company
A private company limited by shares in England and Wales must have at least one director, one shareholder, and may have a secretary.
You need at least one person to form this type of company. If there is only one director, and that director is a natural person in your company, that director can also act as the secretary.
A company must have at least one director who is a natural person. This requirement is met if the office of director is held by a natural person as a corporation sole or otherwise by virtue of an office.
You can register a sole director' company, if you are familiar with the secretaries duties and responsibilities, because all of them belongs to a sole director.
The directors and secretary of your company can also be shareholders.
The Companies Act imposes no restriction on the minimum age of company directors. However Companies House will actively discourage the appointment of anyone under the age of 16 from taking up a company directorship on the grounds that the individuals concerned may not fully understand the legal liabilities that go with the position and for the most part will not have the experience necessary to perform the duties of a company director.
Under the Companies Act 2006, there is no restriction on any or all of the members/shareholders being from an overseas country (i.e. outside the United Kingdom in terms of residency, domicile, citizenship, place of incorporation or all or any of those concepts).
There is no requirement for the officers of your company to be UK citizens or residents, nor for them to hold valid work permits.
Owning, or being an officer of a UK company does not, however, grant you any right to live or work in the UK if you are a foreign national.
Your company must have a registered office address within England or Wales; this is the official address of your company and will be on the public record as such.
Your company must hold its official company documents at its registered office address: its register of shareholders, and its constitutional documents.
So long as you maintain a registered office address in England or Wales, you can conduct your business from any place in the world: you do not have to run your business from your registered office address.
ONLINE COMPANY REGISTRATION: STARTING A SMALL BUSINESS - HOW TO REGISTER AS SELF EMPLOYED, HOW TO CREATE A PARTNERSHIP, SELF EMPLOYMENT VS. LIMITED COMPANY WHICH IS THE BEST WAY TO GO?
Ways to Run a Business: Business Support, Information, and Advice
You are not alone if the thought of running your own business has crossed your mind. Even if your vision of a small business differs from your neighbours', you probably dream have being your own boss and of providing a needed service or creating a cool new product.
However, your very first small-business decision may be to admit that you are not ready for this career - at least not yet. If you are straddling the fence, Coddan CPM will uncover whether this career works for you. You will also gain insight into getting your personal finances in order before exposing yourself to the risk of a new business, and discover how to draw a roadmap to reach your career destination. This easy-to-understand guide is also for those who want to start a new business. Coddan CPM provides independent and impartial business advice, an extensive range of services for small firms and private individuals to help to start-up new businesses.
Coddan can guarantee a private, confidential, personalised, and reliable service at a competitive price. We are a customer-oriented company. We value our customers and offer a personalised service to each and every one of them. When you choose Coddan, you can be assured that you will receive a complete list of services. Our experience with thousands of companies has shown us that many new business owners want the fastest and easiest route to their new limited company with no loose ends. This is exactly what you will get if you choose to incorporate with Coddan.
Coddan is a professional company which has been servicing the international community with a diverse range of top quality UK, EU, USA and offshore services for many years. Coddan incorporates in the UK, USA, and various other offshore locations. We provide business support service (e.g. private foundations, corporate bank account brokerage, mail forwarding, business, and tax-planning) for companies based in various locations worldwide.
Company Start-Up Service
We provide a fast online service for UK company registration, including private, public and guarantee companies formation, establish of LLP and other business entities incorporation in England, Wales, and Scotland. Setting up a business for the first time can be confusing and there are too many issues to consider. You need to decide whether to use professionals who can help you to incorporate your business, and to choose the best ownership structure for your business. Choosing a structure for your business can be a confusing puzzling of terminologies. However, with this basic guide, you will be able to select the structure that will serve your business best at tax time. We would like to recommend you to get a professional legal and tax advice from one of our consultants before a final choice of business entity will be made. There are several types of legitimate commercial and non-commercial legal entities which you can choose to operate as. Find out the links below on the pros and cons of registering your business.
Coddan is one of the leading service providers in the field of English, Scottish, and Irish companies formation and registration. We can help you in starting a business in England & Wales Scotland, Northern Ireland and Republic of Ireland. Over 95% of our UK companies are incorporated within 4-6 hours. The electronic submission of information enables a fast company start-up satisfying all of the required legal formalities: a director, a secretary, a registered office address and shareholders. Our electronic filing software has been approved by Companies House. Companies House (Companies Registry, Secretary of State) is an executive agency of the United Kingdom Government Department of Trade and Industry (DTI). All limited companies in Great Britain are registered with Companies House and file specific details as required by the Companies Act 2006.
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We do not hide any fees from our customers because price transparency is essential to us. Our service fees and business filings fees are provided to our customers upfront. Our online filing makes the ordering and incorporation process easy and convenient, allowing you can concentrate on other areas of your business start-up procedure. Our phones are answered during business hours by specialists, not by an answering machine. We appreciate the value of your time and understand that a person cannot be replaced by technology. This is especially true when it comes to making important business decisions.
Coddan is an industry leader in online business incorporation, document processing and small business start-up services. Our passion for client service is matched only by our desire to take on new work. If you feel we can be of assistance to you, we would be pleased to examine your needs and find the best solution for you. We offer a free initial consultation to enable you to explain your needs and to give us an opportunity to show you how we can be of assistance.
If you would like a personal face-to-face consultation and dedicated help with your business start-up, call us on +44 (0) 207.935.5171, or 0330.808.0089 to discuss your requirements and make an appointment with one of our consultants. A consultant will contact you at a pre-arranged appointment time to discuss your individual circumstances, as well as your suggestions in relation to your incorporation needs. Our project begins with a short meeting, where our advisors gather the information required to set up and register as self-employed, or register a company or a partnership (limited or limited liability partnership) for each client.
Initial contact and dialogue may be by e-mail. At some point in the dialog, it may be decided that telephone or office consultation will be beneficial. To apply for a consultation, please complete an online questionnaire below, we will then arrange a private consultation with one of our consultants. An initial consultation with a private consultant costs between £45.00 and £100.00, please note that our senior advisors charge £150.00 per hour. If an applicant subsequently joins the tailor-made premier service, the cost of the consultation is included in the price of the package. If you prefer not to complete our online questionnaire, you can submit your inquiry by e-mail to consultations@ukincorp.co.uk, with the subject: "Online Inquiry" or by post: Attn: Coddan CPM LTD, Corporate Division, 124 Baker Street, London, W1U 6TY, or by fax: + 44 (0) 207.681.3318. Upon receiving the information, you will be contacted by one of the business consultant to discuss your situation. Coddan CPM offers assistance and resources for those running or starting a business in England, Scotland, Northern Ireland or Republic formation of Ireland. Coddan CPM also offers business-planning, companies incorporation, accounting and consulting services in USA and offshore countries. Request a private consultation now:Click here to apply for a consultation (please use the form if you are serious about choosing an incorporation plan and being enrolled)
How Do You Start Your Own Business?
Start a Business in England, Scotland or Ireland, small business advice, business planning in London (UK), Edinburgh, Glasgow (Scotland), Belfast (Northern Ireland) or Dublin (Republic of Ireland). Setting up and running a business is a time consuming task - you need to be dedicated and focused and able to structure your time in order to be successful. The rewards of starting up your own business can be great, but think carefully if you have the attributes and right sort of personality to cope with going it alone.
Setting up a small business involves a number of important steps if you want to get things right first time. There will always be an element of trial and error in starting up a business; however we hope this overview will guide you through the initial steps, based on the experiences of the Coddan CPM team and our contributors.
There were 2.10 million enterprises registered for VAT and/or PAYE in March 2010, compared to 2.15 million in March 2009, a 2.4 per cent decrease. Between March 2009 and March 2010 there was a reduction in the number of sole proprietors, partnerships and corporate businesses: - a) Corporate businesses (companies and public corporations) represent 58.9 per cent of total enterprises, a proportional increase from 58.2 per cent in 2009; b) Sole proprietors represent 23.8 per cent of total enterprises, a decrease from 24.4 per cent in 2009; c) Partnerships represent 13.2 per cent of total enterprises, a decrease from 13.5 per cent in 2009; d) General government and non-profit making bodies represent 4.1 per cent of total enterprises, an increase from 4.0 per cent in 2009.
The professional, scientific and technical sector accounts for the largest number of businesses with 15.4 per cent of all enterprises registered. This is followed by construction with 13.1 per cent of all enterprises registered and retail with 9.0 per cent. The distribution of enterprises by employment size band shows that 88.6 per cent had an employment of less than 10, and 98.0 per cent had less than 50 employment. Large enterprises, those with 250 or greater employment, accounted for only 0.4 per cent.
Analysis by age shows that 14.3 per cent of businesses were under two years old, and 28.8 per cent were under four years old. A further 43.5 per cent of businesses were 10 or more years old.
All regions experienced a decrease in the number of businesses with the North West and the West Midlands experiencing the greatest decrease of 3.3 per cent each. Scotland experienced the smallest decrease of 0.8 per cent. London accounts for the largest number of businesses with 15.8 per cent followed by the South East and East regions at 15.7 per cent and 10.2 per cent respectively.
At the start of 2003, 46.2 per cent of business employment was in small businesses. Even more interesting is the fact that 2.9 million of these small businesses have no employees at all - the majority of small businesses are operated by individuals, or by a small group of people. Small and medium-sized enterprises (SMEs) together accounted for more than half of the employment (58.2 per cent) and turnover (52.4 per cent) in the UK. In the UK today, over 2.5m businesses are sole proprietors, around a million are limited companies, while some 540,000 are partnerships. But which is best for you?
Choosing the Best Ownership Structure for Your Business: a Sole Trader (Self-Employed)
You should think carefully about which structure suits your particular circumstances before making a decision. Choosing the wrong structure could expose you to unnecessary costs and risks, while failure to address certain practical issues may result in you falling out with your business partners or associates. Having said that, the status of sole trader suits many professions where starting up does not require major investment, and where a skill - such as carpentry, bricklaying or freelance services - is just as important as business acumen. It will not stop you from employing people when you start to get busy, but it will allow you to keep a tight grip on your business and to run it as you wish.
Today, there are several business entity options available for entrepreneurs. Like anything else, each of them has advantages and drawbacks:
Register as a Self Employed
Most people who start in business do so as sole traders. They work on their own. They alone receive the income and are liable for any debts. However, with that comes danger. You're totally liable for any debts that you incur, because the business is, quite simply, you. The financial costs of starting up are minimised by working alone from home. It can be a lonely life but, instead of colleagues, you have customers.
Business people who work in the same town often join organisations such as the British Chambers of Commerce or networking groups such as Business Network International where they meet other people who are in a very similar situation to themselves. Talking your problems over with other people in business, provided that they are not competitors, can help.
Being a sole trader is the simplest way to get started in business (although not necessarily the best, you need to get professional advice before taking the plunge). Once you have informed the government agencies of your intentions to go self-employed, you can start trading right away (subject to any specific licences you might require in your line of work).
As a sole trader, you can quickly adapt to changes in your business with minimal bureaucratic changes required and you have complete control over your business and accounting affairs. However, a sole trader is also ultimately responsible for any liabilities should anything go wrong. If you start working for yourself, you must register with the Inland Revenue as self-employed, even if you already send in a tax return. You should register the moment you start out as a sole trader, otherwise you could incur a financial penalty. There are some exceptions and special rules for particular industries, like the construction industry.
Open a Separate Business Bank Account
Even as a sole trader you should have a separate bank account. This will make it easier for you to do your tax return, and keep track of how much money your business actually has.
Keep Accurate Accountancy Records
Essentially, your business income is counted alongside your existing personal income, so the accounting side of your business will be very straightforward. As the name suggests, you will be personally liable for any debts you incur in the running of your business which you wouldn't be under the limited company route. In terms of accounting, you will need to submit an annual self assessment form to the Inland Revenue and keep accurate and up-to-date records of all business transactions and accounts.
You will also be pay income tax on all profits and pay national insurance contributions on those profits. Losses can be offset against tax on other income. In the April after your business starts, the Inland Revenue will send you a Self Assessment tax return to fill in. The Revenue will also use the return to assess any profit-related (Class 4) NI contributions you may need to pay.
To Register Yourself as a Self-Employed - £52.00!
If you need to complete a self-assessment tax return for the first time, you need to register with HM Revenue and Customs (HMRC). You will also need to use the registration forms to tell HMRC if you become self-employed, even if you already complete a tax return. If your circumstances have changed recently you may need to fill in a self assessment tax return to tell HMRC about new income or capital gains or to claim expenses or reliefs. For example, you may have: -
- Started your own business; - Untaxed income from property or investments; - Expenses to claim (you need a tax return if they're above £2,500); - Capital gains tax to pay.
It is best if you register with HMRC as soon as your circumstances change. The latest you can register is by 5 October after the end of the tax year for which you need a tax return. The tax year runs from 6 April one year to 5 April the next. Therefore, if, for example, you have tax to pay on rent from a property in the 2010-11 tax years, you need to let HMRC know by 5 October 2011.
THIS PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. A pliers seal - £20.00. 2. A tailor-made rubber stamp - £17.00. 3. Domain name registration for two years - £16.00. 4. Business name registration (trading as "…").
Income tax is operated under a "Self Assessment" basis which means that you tell the Inland Revenue what your taxable profit is and they reserve the right (normally within one year of the last date for submitting the Return) to make inquiries. This could involve asking for all your accounting records and supporting vouchers, bank statements (business and private) etc. You are expected therefore to keep sufficient records to support your Tax Return.
Your income tax is calculated and due by 31 January following the end of the tax year. By then, you will already have made payments on account half yearly by 31 January and 31 July. These will have been based on your profit for the preceding tax year. The actual sum due is paid after deducting the payments on account already made. Sometimes your payments on account will be too much in which case you will receive interest called a supplement and a refund.
To be able to fill out a self-assessment tax return correctly, you need to keep a clear record of all your sales and purchases. This includes all invoices you have issued and received, plus any receipts. You will also need to keep a record of money you have personally taken out of the business, such as when you withdraw profits, and of course business bank statements.
All of this paperwork will help you work out what profit your business is making. It can be as simple as revenue in, minus expenses out… although some purchases may not be counted as genuine business expenses. Whatever is left is your profit and what you will be taxed on. There are some allowances you can use to reduce the tax impact such as capital allowances on any equipment you buy.
Tax Contribution as a Self-Employed
Self-employed people are also liable for Class 2 NI contributions (currently £2.50 per week). However, if your earnings are below £5,315 per year (2011-12) you might not need to pay. After that you pay either 10%, 22% or 40% tax on your earnings depending on how much they are. Also, if you're already paying NI contributions in another job, you may be able to defer paying your Class 2 contributions until the end of the tax year. If you earn less than £5,315 per year you can apply for a Certificate of Small Earnings Exception and not pay Class 2 National Insurance contributions. However, you might decide to carry on paying them voluntarily to keep your entitlement to the State Pension and other benefits.
Even though you will have registered as "self employed" when setting up, you won't automatically be VAT registered. You do not usually need to register for VAT until your turnover reaches a certain limit in any 12 months, or you expect it to do so. This limit - the 'VAT threshold' - is currently £73,000. If your business turnover is more than the VAT threshold (currently £73,000) you'll normally have to register for VAT. Even if your turnover's below the threshold it might benefit your business to register voluntarily. You can read our Complete Guide to VAT.
Class 4 National Insurance Contributions
If you're self-employed and your annual profits are over a certain amount you normally have to pay Class 4 National Insurance contributions in addition to Class 2 contributions. The amount of Class 4 National Insurance contributions you have to pay for any tax year is based on your profits for that year. You pay 9 per cent on annual profits between £7,225 and £42,475 (2011-12) and 2 per cent on any profit over that amount.
You work out your Class 4 National Insurance contributions on your Self Assessment tax return and pay them alongside your Income Tax. Class 4 National Insurance contributions don't count towards benefit entitlements. If you have more than one business, special rules apply for calculating adjustments to profits on which you pay Class 4 National Insurance contributions. You don’t have to pay Class 4 National Insurance contributions if any of the following apply: - a) You are under 16; b) You are still working in the tax year after you reached State Pension age; c) You are not resident in the UK for tax purposes.
f you're self-employed you must keep business records such as your accounts, evidence of tax that's been paid and other records relating to your income and outgoings. You'll need these to help you complete your tax return or to answer any questions from HM Revenue & Customs (HMRC) about a return you've completed. You'll need to keep your business records separate from and for longer than your personal records. Most businesses find that it helps to have a separate business bank account. You must keep records so that you can fill in the return fully and accurately, your basic business records must include: - a) A record of all your sales and takings; b) A record of all your purchases and expenses.
You or your accountant use these records to create a profit and loss account - which shows the sales income you've received and the expenses you've paid, and what profit/loss you've actually made.
Self Assessment Deadlines
There are four key deadlines for sending in your tax return and paying any tax due: -
31 October - this is the deadline for sending in the majority of paper tax returns;
31 January - the deadline for sending in your tax return online, and some paper tax returns where the return cannot be filed online;
31 January - this is the payment deadline for what you owe for the previous tax year, and if payments towards the current year's tax bill (called 'payments on account') are due;
31 July - the deadline for your second payment on account - if one is due.
Penalties and surcharges may apply if you miss these deadlines.
Self-Employed Advantages
Total control of the business by the owner;
Easiest and least expensive form of ownership to organise;
Fewer statutory controls;
Lower National Insurance costs;
Tax payable is income tax paid in two instalments (Coddan CPM can help you and advise on your self assessment tax return);
Profits can be withdrawn at any time without PAYE problems;
Keep all the profit - as the owner, all the profit belongs to the sole trade;
Business affairs are private - competitors cannot see what you are earning, so will know less about how the business works and how it succeeds.
Self-Employed Disadvantages
Weak structure;
The sole-trader is the business, on the death of the sole trader, the business effectively ceases;
Unlimited liability: the sole-trader is liable for all debts of the business;
You're personally responsible for keeping your financial records in order and filling in a tax assessment;
May be at a disadvantage in raising funds and are often limited to using funds from personal savings or consumer loans;
Fewer tax reliefs and benefits are available;
There are certain businesses that will not use sole-traders, particularly if you are a contractor;
Tax and National Insurance is deducted directly from your profits for the year and there is less scope for tax planning as with a private limited company.
This isn't a suitable way to trade if you want to hire employees or your business grows so big that there's a long way to fall if things go wrong. Remember, you're totally liable for everything to do with the business.
Top 10 General Advantages of UK Private Limited Companies:
1. Liability is, in the vast majority of cases, strictly limited to the investments made by the shareholders. 2. Company officers are not personally liable for their actions unless there is a clear and serious breach of their fiduciary duty. 3. Limited companies often benefit from greater prestige than their sole proprietorship or partnership counterparts. The reason is because such an enterprise normally requires more planning and thus is deemed more credible. 4. Limited companies often benefit from significant tax advantages. In fact, many countries around the world give exclusive tax incentives to this type of entity. 5. The rights of shareholders are normally clearly defined and protected. 6. Corporate taxes only become payable after the end of the financial year. This means money that would otherwise be taxed on a monthly or quarterly basis, is available to earn further interest before the final payment of tax. 7. You need only appoint one director, and one shareholder. Appointment of a company secretary is optional from April, 2008. 8. Directors, secretary and shareholders can be of any nationality. 9. After a company is registered, there are no obligations for it to start trading within a specified time period. 10. A company is overseas resident if its management and control abide outside the UK. Non-resident companies are generally exempt from tax on capital gains.
Being a sole trader will suit a large number of small business people, however it is not always the best route which is why we suggest discussing your choices with an accountant or other adviser. The limited company route limits the personal liability of its directors if something goes wrong, whereas the sole trader is ultimately personally liable for any losses the business makes, of if you are forced into bankruptcy. In addition, in some areas of business, having a limited company setup will enhance prestige and provide a more professional appearance in certain industries.
Before you start trading you will have to decide under which structure you intend to trade. This will be dependent on the type of business you are running and how you intend to develop in the future.
Everyone starting out on their own needs to. It's quick, it's painless and it can definitely save you time and money. You must do this as soon as you start or within the first three months, even if you already use a Self Assessment tax return. There are penalties for not registering, so fill in the form at the back of this leaflet and send it to us right away. Register with the HM Revenue & Customs:Register as a Sole-Trader just for £52.00
If you would like a personal face-to-face consultation and dedicated help with your business start-up, call us on +44 (0) 207.935.5171, or 0330.808.0089 to discuss your requirements and make an appointment with one of our consultants. A consultant will contact you at a pre-arranged appointment time to discuss your individual circumstances, as well as your suggestions in relation to your registration needs.
Initial contact and dialogue may be by e-mail. At some point in the dialog, it may be decided that telephone or office consultation will be beneficial. To apply for a consultation, please complete an online questionnaire below, we will then arrange a private consultation with one of our consultants. An initial consultation with a private consultant costs between £45.00 and £100.00, please note that our senior advisors charge £150.00 per hour. If an applicant subsequently joins the tailor-made premier service, the cost of the consultation is included in the price of the package. If you prefer not to complete our online questionnaire, you can submit your inquiry by e-mail to consultations@ukincorp.co.uk, with the subject: "Online Inquiry" or by post: Attn: Coddan CPM LTD, Corporate Division, 124 Baker Street, London, W1U 6TY, or by fax: + 44 (0) 207.681.3318. Upon receiving the information, you will be contacted by one of the business consultant to discuss your situation. Request a private consultation now:Click here to apply for a consultation (please use the form if you are serious about choosing an incorporation plan and being enrolled)
Do You Need an Accountant?
Yes. An accountant will prepare your accounts in a way that is acceptable to the taxman, and will ensure that you are charged the right amount of tax. But don't wait until the end of your first year of trading before finding one. An accountant can give you valuable help in setting up your bookkeeping system; if you keep your records in the form suggested by your accountant it will make his job in preparing your accounts easier and therefore cheaper. He will also be able to help you to prepare budgets and cash flow forecasts, which your bank manager will want to see.
Coddan CPM assists self-employed persons with the self-assessment tax return they may or may not be VAT registered and may even have employees who will need to have the correct taxes and contributions calculated and statutory returns made to the HM Revenue & Customs.
Coddan CPM has come together to bring the self-employed a solution whereby they have their accounts maintained on a quarterly basis ensuring that accounts are consistent and up-to-date, no supplier / customer payments are left outstanding, VAT returns are filled, for the VAT registered and for sole traders with employees, the correct taxes are deducted and all statutory returns are filled.
Choosing the Best Ownership Structure for Your Business: Partnerships
You could set up in business with a colleague or friend. Perhaps you each have different skills to bring to the enterprise. One may be a good sales person and negotiator while another has the ability to provide a service, like mending guitars, writing websites, compiling accounts, analysing markets or sculpting. When you go into business with someone else, this is usually known as a 'partnership'. Everyone might own an equal share or some may have a larger proportion of the business than others. In a partnership, you are liable for the debts of the business in proportion to how much of it is yours and your income may be of a similar proportion.
Unlike other business formats, partnerships (and sole traders) can start trading straight away, although certain types of businesses may need a licence to trade. If trading under a name other than that of the owners, must display names of owners and an address, for each, at which documents can be served.
Behind sole-traders, a partnership is the second most popular type of business and is more commonly associated with professional services such as accountants, solicitors and doctors. It is also common in partnerships for each partner to specialise in a specific area of the business. For example, in an accountancy service, one partner may specialise in bookkeeping, another partner may specialise in financial advice, and so on…
You have to be aware that because any decisions and actions are dependent on the other partners agreeing, certain conflicts may arise from time to time. Such conflicts have led to partnerships failing and so it is important that some control can be maintained by compiling a 'partnership agreement' prior to starting the business. This agreement will be outlined later in the article.
Types of Partnerships: The General Partnership
The general partnership, which is the scenario outlined above and is subject to the Partnership Act, 1890. Full partnerships, as outlined above, have between two and twenty partners, but more commonly, the number of partners in a full partnership lies between two and four inclusive.
An arrangement in which two or more individuals or other persons (such as a company and an individual) conduct business as partners, whether officially or not. In terms of asset protection, general partnerships can be even worse than sole proprietorships. Anything that one partner does affect all of the partners, because each partner of the general partnership is personally responsible for all obligations of the partnership deals. Thus, each general partner's exposure to risk is increased by a factor equal to the number of general partners in the business.
The Limited Partnership
The limited partnership, which is subject to the Limited Partnership Act 1907. Limited partnerships they are very rare today and account for less than 1% of all partnerships in the UK. A limited partnership is formed when one or more of the partners invest capital into the business but do not participate in running and managing the business. These partners therefore have limited liability as they can only lose the amount of money that they initially invested into the business.
A limited partnership is an association of one or more general partners together with one or more limited partners to conduct business for profit as co-owners. The most important feature of a limited partnership is that the limited partner enjoys limited liability as long as s/he does not participate in the control of the partnership business. The general partners of the limited partnership are the ones who are responsible for the obligations of the limited partnership.
In a limited partnership, it is the general partner who remains liable for the debts and obligations of the entity. For larger risk exposure, a company (corporation) may be formed to serve as the general partner. A corporate general partner is protected from direct attack by a judgment creditor because the ultimate liability for the debts and obligations rests with the shareholders.
By spreading share ownership, individual exposure is considerably reduced. Even without a corporate general partner, risk can be spread by distribution of limited partnership shares. If a judgment creditor obtains a charging order against one partner, the order goes to that partner's share in distributions from the partnership, and not to the entire business.
Limited Liability Partnership (LLP)
Economy
Premier
Deluxe
UK Limited Liability Partnership from only £125.00!
All inclusive limited liability partnership (LLP) registration. Each limited liability partnership package includes all statutory paperwork and is fully compliant with company and partnership law. All our limited liability partnerships are registered as general trading LLPs and can be used to conduct any type of business. A certificate of registration, the partnership agreement, and other relevant documents will be sent directly to you via e-mail immediately following the formation of your LLP. We will incorporate your LLP from scratch using your own registered office address, and appoint your own candidates to the roles of members (partners). Upon formation, these details will be recorded as the original details of your LLP. All government and filing fees are included in the cost of our packages. It will take just couple of minutes to complete the online registration form, then your limited liability partnership could be up and running within 4-6 working hours.
THE ECONOMY PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. Laminated hard-copy of the certificate of registration - £5.95. 2. Hard bound copies of your partnership agreement (four different options) - £14.00. 3. Two membership certificates printed in an elegant format - £8.00. 4. Certificate of good standing - £45.00. 5. A partnership kit: register of members, and debentures, and a minute book - £40.00. 6. Partnership pliers seal - £20.00. 7. Partnership tailor-made rubber stamp - £17.00. 8. Domain name registration for two years - £16.00. 9. Notarisation & apostille certification of the LLP documents.
UK LLP With a Registered Office Address in England For Just £175.00!
All inclusive limited liability partnership registration. Each limited liability partnership package includes all statutory paperwork and is fully compliant with company and partnership law. All our UK LLPs are registered as general trading partnerships and can be used to conduct any type of business. A certificate of registration, the partnership agreement, and other relevant documents will be sent directly to you via e-mail immediately following the incorporation of your LLP. We will register your limited liability partnership from scratch using one of our own registered office addresses in England, and appoint your own candidates to the roles of members (partners). Upon incorporation, these details will be recorded as the original details of your limited liability partnership. All government and filing fees are included in the cost of our LLP registration packages. It will take just couple of minutes to complete the online registration form, then your LLP could be up and running within 4-6 working hours.
THE PREMIER PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. A laminated hard-copy of the certificate of registration - £5.95. 2. Hard bound copies of your partnership agreement (four different options) - £14.00. 3. Two memebership certificates printed in an elegant format - £8.00. 4. Certificate of good standing - £45.00. 5. A partnership kit: register members, and debentures, and a minute book - £40.00. 6. Partnership pliers seal - £20.00. 7. Partnership tailor-made rubber stamp - £17.00. 8. Domain name registration for two years - £16.00. 9. Notarisation & apostille certification of the LLP documents.
UK LLP Registration with a Registered Office Address and Two Nominee Members For Just £525.00!
All inclusive UK LLP incorporation. Each limited liability partnership package includes all statutory paperwork and is fully compliant with company and partnership law. All our UK limited liability partnerships are registered as general trading partnerships and can be used to conduct any type of business. We will incorporate your LLP from scratch using one of our own registered office addresses in England; appoint our two candidates to the role of a nominee members (partners). Upon LLP incorporation, these details will be recorded as the original details of your limited liability partnership. All government and filing fees are included in the cost of our packages. The following documents, will be posted to you upon formation of your LLP: a hard bound copy of corporate documents includes: a laminated copy of the certificate of registration of your LLP, a hard bound copy of the partnership agreement, a hard bound copy of the minutes of the first meeting of members (partners), power of attorney, membership certificates, and your partnership register. It will take just couple of minutes to complete the online LLP registration form, then your LLP could be set-up and running within 4-6 working hours.
THE DELUXE PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. An additional laminated hard-copy of the certificate of incorporation - £5.95. 2. An additional hard bound copies of your partnership agreement (four different options) - £14.00. 3. Additional two membership certificates printed in an elegant format - £8.00. 4. Certificate of good standing - £45.00. 5. A partnership kit: register of members, and debentures, and a minute book - £40.00. 6. Partnership pliers seal - £20.00. 7. Partnership tailor-made rubber stamp - £17.00. 8. Domain name registration for two years - £16.00. 9. Notarisation & apostille certification of the LLP documents.
An LLP is similar in some ways to a limited partnership, except that the individual members have lower liabilities to any debts which may arise from running the business. There are more administrative duties involved compared to the partnership business structure. In fact, an LLP is more similar to operating a limited company. In terms of liability, the limited liability partnership is itself liable for debts run up in running the business, rather that the individual members of the LLP. As a result, limited liability partnerships are only recommended for profit running businesses.
An LLP may be formed by two or more persons (individuals or companies) to carry-on a trade or business. To form an LLP, the partners have to file an incorporation document at Companies House. The owners and managers of an LLP are the same. The management structure and relationship between the partners are a matter for agreement between them and may be recorded in a separate LLP Agreement, similar to a Partnership Agreement.
Tax Matters
All profits in a Limited Liability Partnership (LLP) are split between the members. The tax liability falls on the individual members, not the LLP itself. Most members are likely to be self-employed, so all income should be declared via self-assessment. If an LLP member is another business, they will be liable to pay corporation tax on any income they receive from the LLP.
As with other company structures, if the LLP is expecting to generate income of £73,000 or more, they should register for VAT. If they have employees, the LLP should set up a PAYE system to collect income tax and National Insurance contributions.
Dividends
A UK LLP is not itself liable to tax in the UK as the LLP tax provisions identify other persons (i.e. the members) as the persons who are to be taxed. Accordingly for the purposes of the Double Taxation Agreements (DTAs) the LLP is not regarded as being resident in the UK and cannot itself therefore claim relief from foreign taxes under such agreements. As is now the case with ordinary and limited partnerships the members must make the claim.
Assuming they are UK residents in accordance with the provisions of the relevant DTA the members of an LLP are entitled to relief for any withholding tax on overseas dividends. Normally a DTA provides for withholding tax of a maximum of 15% to be deducted and relief for that tax given. Where a partner is an individual then no relief is due in respect of the taxes paid (the underlying taxes) on the profits out of which the dividend is paid.
In the very narrow circumstances where the LLP is not treated as transparent, but instead as a body corporate for tax purposes (such as when the LLP is in liquidation or being wound up in circumstances where transparency cannot be retained), the HM Revenue & Customs take the view that the LLP can itself claim relief for foreign taxes, including if appropriate underlying tax.
LLP Advantages
No personal liability on a member for the LLP's debts and contracts;
No joint and several liability for the negligence of any member;
As a separate legal entity, LLP's may own property, sue, and be sued in LLP's name;
The management flexibility inherent in partnerships;
Members' liability to contribute in a winding-up is limited to the amount they agree to contribute in the event of a winding-up as recorded in the LLP agreement;
LLPs are not a separate entity for income tax purposes, profits and losses are passed through directly to the partners;
LLP can be administrated outside of the UK;
There are no nationality requirements for members (partners).
LLP Disadvantages
Formation and subsequent changes in structure are complex;
Problems with partner(s) as the result of misunderstandings, different goals, etc., can weaken or destroy the partnership;
Have to apply the same tests to its members, which apply to directors for fraudulent and wrongful trading under the Insolvency Act;
Disclosure of information (in particular accounts and an auditors' report) must be filed with the Registrar of Companies and becomes public;
Money and property contributed to the LLP becomes owned by the partnership unless otherwise stated and the contributor is not entitled to its return except as stated in the partnership agreements.
LLP Formation and Registration
We provide different packages with the different options depending on your business needs; each package offers the complete formation of a limited liability partnership, which is usually ready to commence trading within four to six days. Our packages offer the perfect results for those people who are taking the first step into the business or whose budget won't stretch to bespoke business solutions, there are no dumbfounds and no hidden charges, - what you see is what you pay! We can also assist clients with the special needs or requirements, we could make a tailor made package that would suit your personal needs and wants. If you choose us as your business service provider, you will almost immediately realise that our team of proficient advisors, is your own dedicated support team. Request a private consultation now:Click here to apply for a consultation (please use the form if you are serious about choosing an incorporation plan and being enrolled)
In the case if you would like to register a limited liability partnership in the United Kingdom and you are not UK resident or British citizen, this would not have been a problem if you will appoint us as your incorporation agent. A party to a contract who is not domiciled in England or Wales usually appoints a process agent. We, as your incorporation agent will act as the agent for the acceptance of service of incorporation process in England, Wales, Scotland, or in Northern Ireland (in Belfast).
You will not be left on your own once you have started up an LLP, we still are here to help you with any problems that you may face as you establish and grow your business. Our advisers will answer any questions you may have and explain what you, or we, might do in your current circumstances. If necessary, you may return to us for further help as matters progress. Our team of full-time professional business advisers can guide you through the essential steps to launching your own business. Please, take a note that we can have meetings with current of positional customers by appointment only. Order the Economy formation package:Economy LP formation package - £125.00
Choosing the best ownership structure for your business: Limited companies
The third way to run a business is as a limited company. The business is registered with Companies House and is an entity of its own. There are more rules associated with running a business this way but there may be tax advantages. Those involved have shares in the business proportional to their involvement. A limited company is regarded in law as a separate legal personality, distinct from its shareholders.
For this reason, if the company for any reason is unable to meet its liabilities, the shareholders will only be personally liable for the unpaid amount of their shares. If the shares are fully paid, then the shareholder cannot be asked to pay anything further.
The higher level requirements for limited liability companies are as follows: -
Company must be registered at Companies House;
Annual accounts must be filed at Companies House;
Annual return must be completed each year to update Companies House with basic details relating to the company;
Inland Revenue must be informed if the company has any profits or taxable income in a company year;
Company must complete an annual Inland Revenue corporation tax return and pay the due taxes within nine months of the company year end each year;
Anyone employed by the company must pay income tax and national insurance on their income.
E-Quick
Economy
Premier
E-Quick Company Formation from only £32.00!
The E-Quick business formation package is our most popular package with UK residents. It is ideal for small and medium businesses that have their own address in the UK, which can be used as a registered office address of the company. We will incorporate your company from scratch using your own registered office address, and appoint your own candidates to the roles of director, secretary (if needed), and a shareholder. Upon company registration, these details will be recorded as the original details of your company. The government and filing fees are included in the price of this package. A certificate of incorporation, Coddan' model of the memorandum & articles of association, the combined registers, share certificates and minutes of the first directors' meeting (usually not provided by other agents) will be sent directly to you via e-mail immediately following the formation of your company.
THE E-QUICK PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. Registered office address in London for 1 year - £50.00. 2. Nominee secretary for 1 year - £125.00. 3. Nominee director for 1 year - £350.00. 4. Laminated certificate of incorporation - £5.95. 5. Hard bound copies of your memorandum & articles of association - £14.00. 6. Two share certificates printed in an elegant format - £8.00. 7. Certificate of good standing - £45.00. 8. A corporate kit: a register of directors, secretaries, members, and debentures, and a minute book - £40.00. 9. A corporate tailor-made rubber stamp - £17.00. 10. Domain name registration for two years - £16.00. 11. Notarisation & apostille certification of the corporate documents. 12. Opening a business account in the UK or in offshore jurisdictions.
Economy Company Formation With Our Registered Office Address from only £82.00!
The Economy is our most popular package for small and medium size businesses, such as those being run by a sole director from home, who would like a separate, prestigious registered office address to be displayed on the public record; and for companies owned by overseas residents, who still need a local registered office address but would rather not open local offices. We will incorporate your company from scratch using our own registered office address in London, and appoint your own candidates to the roles of director, secretary (if needed), and a shareholder. Upon company registration, these details will be recorded as the original details of your company. The government and filing fees are included in the price of this package. A certificate of incorporation, Coddan' model of the memorandum & articles of association, the combined registers, share certificates and minutes of the first directors' meeting (usually not provided by other agents) will be sent directly to you via e-mail immediately following the formation of your company.
THE ECONOMY PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. Nominee secretary for 1 year - £125.00. 2. Nominee director for 1 year - £350.00. 3. Laminated certificate of incorporation - £5.95. 4. Hard bound copies of your memorandum & articles of association - £14.00. 5. Two share certificates printed in an elegant format - £8.00. 6. Certificate of good standing - £45.00. 7. A corporate kit: a register of directors, secretaries, members, and debentures, and a minute book - £40.00. 8. A corporate tailor-made rubber stamp - £17.00. 9. Domain name registration for two years - £16.00. 10. Notarisation & apostille certification of the corporate documents. 11. Opening a business account in the UK or in offshore jurisdictions.
Premier Company Formation With Our Registered Office Address & a Nominee Secretary from only £207.00!
This is another one very popular package for small and medium size businesses, such as those being run by a sole director from home, who would like a separate, prestigious registered office address to be displayed on the public record, and for companies owned by overseas residents who still need a local registered office address but would rather not open local offices. This package is often chosen by such customers, who are looking to minimise a sole director personal liability (and who are not quite familiar with the new UK corporate legislation), because this package includes a provision of a nominee secretary for 12 months. We will incorporate your company from scratch using one of our registered office address in London, and appointing our nominee secretary. We will appoint your own candidates to the roles of director, and shareholder. Upon formation, these details will be recorded as the original details of your company. The government and filing fees are included in the price of this package. The following hard bound copy of corporate documents will be posted to you upon formation of your company: a laminated copy of the certificate of incorporation of your company; a hard bound copy of the memorandum and articles of association; a hard bound copy of the minutes of the first meeting of directors; two elegant printed share certificates, and your company register.
THE PREMIER PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. Nominee director for 1 year - £350.00. 2. Laminated certificate of incorporation - £5.95. 3. Hard bound copies of your memorandum & articles of association - £14.00. 4. Two share certificates printed in an elegant format - £8.00. 5. Certificate of good standing - £45.00. 6. A corporate kit: a register of directors, secretaries, members, and debentures, and a minute book - £40.00. 7. A corporate tailor-made rubber stamp - £17.00. 8. Domain name registration for two years - £16.00. 9. Notarisation & apostille certification of the corporate documents. 10. Opening a business account in the UK or in offshore jurisdictions.
When you set up your limited company you have a legal obligation to tell HMRC that your company exists and is liable for tax. This is also the time to tell them who your accountant is. Often you will need to fill in a form to authorise your accountant to act on your behalf.
It is therefore, strictly speaking, incorrect to say that a company has limited liability; it is the shareholders whose liability is limited - up to the unpaid amount of their shares. This situation must be contrasted with the personal liability of a sole trader or a partner in a partnership (with the exception of a partner with limited liability or in the case of a limited liability partnership (LLP)). In these cases the sole trader or partner may be personally liable for any debts which the business is unable to meet.
As noted above, there may be instances when personal liability cannot be limited. This situation usually affects directors who may be personally liable if they have acted fraudulently of negligently. In particular, you should be aware of the personal liability which can accrue to directors if their company trades whilst it is insolvent.
Whilst the limitation of liability can prove attractive, you should be aware that in certain cases, notably when dealing with banks or other financial organisations, personal guarantees may be requested from the directors, and/or shareholders. This may then negate this particular advantage.
Filing Your Company Tax Return with the HMRC: A Beginner's Guide
Once a year you will get a notice from HMRC to file a company tax return. It's something that's worth putting in your diary each year, as it is your responsibility to fill out the tax return even if the notice doesn't reach you for whatever reason.
It involves filling out a company tax return form CT600 plus sending off accounts information prepared by your accountant.
HMRC is encouraging businesses to do this online as much as possible. As well as speeding up the process, the tax calculations are done by the website. Many accountants use special software to prepare company tax returns, and submit them online for you.
Even though you are using an expert to complete your company tax return, it's worth you checking all of the details and ensuring everything is correct. Legally it is the company's responsibility to ensure the information sent is true and accurate. And it is you - not your accountant - that will have to pay any penalties for getting it wrong.
Who is Subject to Corporation Tax Requirements
The following limited companies and unincorporated organisations are subject to Corporation Tax requirements: -
Limited companies incorporated in the UK;
Foreign-based companies with a permanent place of business in the UK;
Members' clubs, such as social clubs, sports clubs and holiday clubs;
Societies, such as friendly societies and provident societies;
Associations, such as housing associations and trade associations;
Co-operatives;
Other unincorporated associations;
Groups of individuals carrying on a business that is not a partnership;
Charities, or companies that are subsidiaries of - or wholly owned by - a charity.
The taxable profits or surpluses of these businesses and organisations are subject to Corporation Tax requirements. A company or organisation subject to Corporation Tax requirements is known to HMRC for Corporation Tax purposes as being 'within the charge to Corporation Tax', 'chargeable to tax' or in 'the charge to tax'.
Who is Not Subject to Corporation Tax Requirements
Businesses and organisations that are not subject to Corporation Tax requirements include: -
Sole traders - one-person businesses that are not operating through a limited company;
Traditional partnerships;
Limited liability partnerships (LLPs);
Local authorities;
Local authority associations;
Investment clubs;
Allotment and garden societies;
Health service bodies.
If your business or organisation is not subject to Corporation Tax, you don't need to meet Corporation Tax deadlines and requirements. This doesn't mean your business is exempt from all taxes as you may have to complete a Self Assessment return.
Accounting Periods
Your business is self-assessed over accounting periods. For most businesses these are 12 months long and match the dates you have your accounts drawn up.
It is possible to set accounting periods for less than 12 months, although not longer.
Payment of Corporation Tax itself is due 9 months and one day after the company's "normal due date" - usually the last day of your annual accounting period.
Company Tax Return Information Needed
Each tax return must contain your company name, registration number, the registered office and tax reference number. You will find this on the notice to deliver a company tax return.
What Will You Pay?
The UK draws a distinction between employment income and self-employment income. Directors are taxed on the basis that they have employment income. But in some countries the dividing line would be drawn at a different point and directors who are not full-time officers may be treated as independent contractors (that is, as if they were self-employed). All businesses have to comply with certain legal requirements. This can include requirements in relation to Health and Safety, Trade Descriptions Act, Data Protection Act and Employment Law, to name but a few.
As well as being a legal requirement, good health and safety practices pay for themselves by improving your reputation with customers, the local community and most importantly your own employees. If you employ five or more people, you are required to prepare a statement of policy on health and safety at work and to make arrangements to put this policy into practice.
There are two rates of corporation tax depending on the level of profits you make. In 2011 to 2012, you will be charged 20 per cent on profits of up to £300,000. This is known as small companies' rate and will apply to IT contractor companies. The main rate is 26 per cent on profits of £1.5 million and above.
Trading and Non-Trading for Corporation Tax Explained
HM Revenue & Customs (HMRC) may consider your company or organisation to be 'active' for Corporation Tax purposes when it is, for example, carrying on business activity, trading or receiving income. But there are a number of circumstances where HMRC would not consider your company or organisation active for Corporation Tax purposes. In this case, your company or organisation is 'dormant' for example - not active or not trading. HMRC may also deem your unincorporated organisation, such as a members' club, dormant for Corporation Tax purposes if it is active or trading but it's due to pay Corporation Tax of less than £100.00 for an accounting period.
What is Active for Corporation Tax Purposes
Generally your company or organisation is considered to be active for Corporation Tax purposes when it is, for example: -
Carrying on a business activity such as a trade or professional activity;
Buying and selling goods with a view to making a profit or surplus;
Providing services;
Earning interest;
Managing investments;
Receiving any other income.
This definition of being active for Corporation Tax purposes is not necessarily the same as that used by HMRC in relation to other tax areas such as VAT, or by other government agencies such as Companies House. It may also not match definitions in the various accounting conventions that are used to prepare audited accounts, such as the Financial Reporting Standards (FRS) issued by the Accounting Standards Board, or the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.
When Your Company or Organisation Has Not Yet Started Trading
Generally, HMRC considers that your company or organisation has not yet become active or started trading if it has not yet engaged in any business activity. In this context, business activity means carrying on a trade or profession, or buying and selling goods or services with a view to making a profit or surplus. Your newly-formed company or organisation may not be active. However, you may still carry out activities (known as ‘pre-trading activities') or incur costs (known as ‘pre-trading expenditure') before you officially open your business without HMRC deeming that you have started trading. Activities or expenditure to do with setting up a business that are not considered trading by HMRC for Corporation Tax purposes include: -
Preliminary activities such as writing a business plan or negotiating contracts;
Preliminary expenditure such as incurring costs with a view to deciding whether to start a business.
Keeping Records
You need to keep all of your records for at least six years, and some would argue it's sensible to keep them longer than that. This includes all receipts and invoices, plus the record of all sales and purchases made.
HMRC says it is acceptable to keep records in legible alternative such as an optical imaging system, where documents are scanned into a computer.
Private Companies: Deadlines and Penalties (Companies House)
You can send your company tax return in any time after the end of your accounting period (your year end). You have to do it by the statutory filing date. This is usually the later of 12 months after the end of your accounting period, or three months after you get a notice to deliver a company tax return.
If you send the tax return in late your company will be charged a penalty. There may also be a penalty if the tax return is incorrect.
If you do owe any corporation tax, this is due nine months and one day after something called your normal due date. This is the last day of your accounting period. If that was 31st December, your tax payment will be due on 1st October. There may be a penalty and interest charges if you pay it late.
Coddan specialising in incorporation of a private limited companies by shares or limited by guarantee, public limited companies by shares or limited by guarantee, partnerships (in England, Wales, Scotland and Ireland incl. Republic of Ireland) and secretarial, notary and accounting services.
If required, we can provide a registered office address facility (we are offering registered office addresses in London, registered office addresses in Bristol, Cardiff, Edinburgh, Glasgow, Sussex, Manchester, and also in Birmingham. Upon special request, we can provide a registered office address in any city or town in England or Wales. We can also provide a telephone number for your company with call forwarding from any UK city and town.
If your business is at an advanced stage of development your needs may be varied and you will need to make an appointment with us to discuss your circumstances. You can use our office where we will store all your company records and provide you with a summary of the financial position of your business. Every quarter you can then meet with one of our accountants for a health check on your business and plan for any new developments. Alternatively you may need specific services such as VAT returns, PAYROLL or/and statutory accounts preparation.
Company Administration and Accounts
If you want to focus on earning company turnover and do not want the burden of company administration and accounts, this service will suit you. Get rid of the hassle without losing control! This service is designed for the busy executive who wants to focus on earning company income without being bogged down with the daily administration involved with running a company.
Coddan CPM will handle all administration and run a PAYROLL for directors and shareholders;
We will provide you with a detailed breakdown of your company position as and when you need it;
We will do all company administration including all statutory requirements for Companies House and Inland Revenue;
We will complete VAT and corporation returns and ensure these liabilities are provided for and paid on time.
All you will have to do is invoice your client for your income and provide us with a copy of these along with the business expenses that you incur. This service will cover the following: -
Company administration - general administration, answering queries from Companies House and Inland Revenue;
PAYE registration and returns;
VAT registration and quarterly VAT returns. We ensure that provision is made to meet and pay the VAT liability and ensure that payment is made on time;
Annual Shuttle Return to Companies House;
Run a PAYROLL, paying directors, staff and shareholders on behalf of the company;
Ensure timely payment and provision for tax and National Insurance liabilities;
Daily bank reconciliation of a company bank account;
Production of two sets of financials to account for contracts that fall outside IR35 and those that fall within the IR35 legislation;
Cessation accounts and company closure if required;
Submission of Annual Reports and Accounts to Inland Revenue and Companies House.
Help Starting a Business: Why Use Coddan as Your Agent and Corporate Provider?
We calculate your tax liability on a pro rata basis so that you are providing for your tax liability correctly on an ongoing basis and not over or under providing. If you are uncertain about your IR35 status, every time your company gets paid we calculate what your IR35 liability would be if you fell within the legislation. You can then opt to retain funds in your company account to cover yourself until you have decided your status.
You, the director are in control; we do not control your company. You determine what your expenses will be, how much dividend you want paid, how much salary you want paid. We are sensitive to your needs, available for advice and flexible … unlike composite companies or the managed service of our competitors.
If you have questions about legal aspects of your company incorporation application, you should speak to one of our consultants. We are very happy to provide a practical support, we have a team of professional business advisers and consultants who can support you to strengthen and grow your business. We can help if you need a qualified advice and guidance in any of the following areas: -
How to select the best business form;
How to start and register your own business in the United Kingdom, Northern Ireland or/and Republic of Ireland;
How to get your company up and running;
How to satisfy to the new legislation (Companies Act 2006) and legal requirements prior to register a new corporate entity in the UK;
Reasons to register a public company, non-profit company or limited liability partnership (LLP);
How to establish a subsidiary company or a branch in the United Kingdom, Republic of Ireland, United States of America, Cyprus, or in other offshore low-tax countries;
How to manage your already established company;
How to fulfil the legal requirements and avoid penalties and common mistakes when sending forms and documents to Companies House; etc.
In the case if you would like to register a company in the United Kingdom and you are not UK resident or British citizen, this would not have been a problem if you will appoint us as your incorporation agent. A party to a contract who is not domiciled in England or Wales usually appoints a process agent. We, as your incorporation agent will act as the agent for the acceptance of service of incorporation process in England, Wales, Scotland, or Ireland (in Belfast or Dublin).
You will not be left on your own once you have started up a company, we still are here to help you with any problems that you may face as you establish and grow your business. Our advisers will answer any questions you may have and explain what you, or we, might do in your current circumstances. If necessary, you may return to us for further help as matters progress. Our team of full-time professional business advisers can guide you through the essential steps to launching your own business. Please, take a note that we can have meetings with current of positional customers by appointment only.
Do I Need a Visa for the UK to Start a Business in England, Wales, Scotland or Ireland?
The United Kingdom is the home of Europe's largest city and is embedded in the culture, vocabulary and dreams of English speakers worldwide. It is seen as an economic hub for trade between Europe and North America with the United Kingdom benefiting from the situation for centuries. The United Kingdom still has one of the strongest economies in the world today. The United Kingdom has a population of diverse backgrounds, given the variety of people who have settled here over the centuries. The majority of the population is Anglo-Saxon which is predominantly German-Scandinavian in origin. Since the middle of last century there has been significant immigration from many ex-colonies, especially the Caribbean, Pakistan and India. The United Kingdom has a positive view on increasing the multicultural population of the country with the amount of people immigrating to the United Kingdom increasing every year. The UK is in the process of liberalising its immigration laws and has a generally open and positive approach concerning those who wish to enter the country to work or set up a business.
British citizens, those with Right of Abode or settled in the UK and nationals of European Economic Area countries (see Appendixes for a list of these countries) are permitted to live and work freely in the UK. All others can apply to enter the UK to work or set up in business. Nationals of certain countries, known as visa nationals, require a visa or prior entry clearance to enter the UK for any reason. Others require prior entry clearance, depending on the reason for coming to the UK. Entry clearance must be applied for at the British Embassy, High Commission or other British Diplomatic Mission which issues visas in the country where the applicant is normally and legally resident. Where there is no such post the applicant must apply to the appropriate designated post outside the country or territory where they are living. An applicant for entry clearance must be outside the United Kingdom and Islands at the time of the application.
Work Permits
A UK Work Permit is a document issued by Work Permits (UK) of the Home Office Immigration and Nationality Directorate. It gives an employer permission to employ you in a specific job at a specific location. A Work Permit is authority to take employment, but does not grant leave to enter the UK. A Work Permit holder must apply to an immigration officer for leave to enter at a UK port of arrival. A visa national must apply for a visa before travelling to the UK.
Any non-EEA national subject to immigration control who wishes to come to the UK to work must, with limited exceptions, have a Work Permit. The length of time taken to process a Work Permit application depends on the nature of the application but, as a general rule, employers should allow at least six to eight weeks. Work Permit applications should be made by the UK employer and a permit obtained before the overseas national concerned arrives in the UK. If a person arrives in the UK without a Work Permit, they will normally be refused entry.
Self-Employment Vs. Limited Company
As many know, employees have rights on how many hours a week they must work on average. Most employees do not work more than forty-eight hours a week and receive overtime pay for additional hours put in. When self-employed, however, these rules do not apply. A self-employed person could work seventy hours a week, if that is what is needed, and would get paid no overtime or nothing else additional. Because they work for themselves, their wages depend on what they bring in.
Another responsibility that is given to the self-employed is taxing their income. A self-employed person must allot for his or her own tax payments and follow the guidelines set by the government. Normal employees depend on their employers to do this task for them and are not required to worry about this.
Self Employment Vs. Limited Company Which is the Best Way to Go?
Well there are pros and cons to each. A limited company means you will have to have all your accounts audited by an accountant which will cost you around £500.00. However there are substantial tax benefits from being a limited company as you can save on paying National Insurance Class 4 contributions. Here are some examples: -
If you earn £20,000 as a LTD company you will pay £2,898 total tax, self employed you will pay £1,435 more of a total of £4,334.
If you earn £30,000 as a LTD company you will pay £4,798 total tax, self employed you will pay £2,535 more of a total of £7,334.
If you earn £40,000.00 as a LTD company you will pay £6,698.45 total tax, self employed you will pay £3,749 more of a total of £10,448.
Being an LTD company also protects your personal assets should you business get into financial difficulty. If you're starting out a capital is restricted and you expect to earn under £20,000 then it may worth sticking to being self employed and then move over to being a private limited company when have more money available to you. Typically self employed people get a bad deal with getting competitive mortgages. The reasons why are obvious; to the lender they are a risk, an unknown quantity. They could earn £100,000 one year, but only £10,000 the next year, so it's clear why lenders are cautious.
Traditionally self employed people had to go for self certified mortgages which means you need no proof of income. It may sound ideal but the rates are much less competitive, usually 1% to 4% above normal mortgages which is quite costly.
Over the last few years with more and more people working on casual contracts and freelance work lenders are becoming more flexible. If you can prove your income over the last three years then you stand a very good chance. Proof will need to be provided by a certified, or better yet a chartered accountant. Many lenders will accept your tax SA302 form which show your income declared to the tax office. For those with less than 2 years proof may find it difficult to get anything other than a self-certified mortgage. If you are self-employed and your partner is on fixed income then this will make your chances of securing a competitive mortgage much improved.
All businesses have to comply with certain legal requirements. This can include requirements in relation to Health and Safety, Trade Descriptions Act, Data Protection Act and Employment Law, to name but a few.
As well as being a legal requirement, good health and safety practices pay for themselves by improving your reputation with customers, the local community and most importantly your own employees. If you employ five or more people, you are required to prepare a statement of policy on health and safety at work and to make arrangements to put this policy into practice.
Before you start trading you will have to decide under which structure you intend to trade. This will be dependent on the type of business you are running and how you intend to develop in the future. We have several guides and calculators that can help you through this process. Alternatively you can make an appointment with one of our consultants.
Choosing the best ownership structure for your business: Franchises
Many commercial organisations, like restaurants, expand by getting other people to buy into their business. They usually provide equipment, raw materials, training and a well-known business name. You pay for all of these services and operate a branch of the business yourself in order to make a profit. There are numerous franchised businesses in the UK. If you are tempted to go into one, the best advice we can give is to get a knowledgeable independent person, perhaps a solicitor, to look over the franchise agreement to be sure that it's favourable to you. Further information about franchising can be obtained from the British Franchise Association.
An important step in the small business start-up process is deciding whether or not to go into business at all. Each year, thousands of potential entrepreneurs are faced with this difficult decision. Because of the risk and work involved in starting a new business, many new entrepreneurs choose franchising as an alternative to starting a new, independent business from scratch.
What is Franchising?
A franchise is a legal and commercial relationship between the owner of a trademark, service mark, trade name, or advertising symbol and an individual or group wishing to use that identification in a business. The franchise governs the method of conducting business between the two parties. Generally, a franchisee sells goods or services supplied by the franchisor or that meet the franchisor's quality standards.
Franchising is based on mutual trust between the franchisor and franchisee. The franchisor provides the business expertise (marketing plans, management guidance, financing assistance, site location, training, etc.) that otherwise would not be available to the franchisee. The franchisees bring to the franchise operation the entrepreneurial spirit and drive necessary to make the franchise a success. There are primarily two forms of franchising: -
Product/trade name franchising; and
Business format franchising.
In the simplest form, a franchisor owns the right to the name or trademark and sells that right to a franchisee. This is known as "product or trade name franchising". The more complex form, "business format franchising," involves a broader ongoing relationship between the two parties. Business format franchises often provide a full range of services, including site selection, training, product supply, marketing plans, and even assistance in obtaining financing.
Points to consider when starting your own business
At the outset, you should decide what to call your business. It may be your own name, especially if you are a sole trader, eg 'James Doe, Advertising Consultant'. You can decide to give it a name and perhaps a logo. If it's a limited company, it must have a name of its own.
Business Premises
Organisations (sometimes called enterprise agencies) rent out space to small businesses. Some offer a range of services, including a receptionist, word processing facilities and access to office equipment, such as a photocopier.
Routes Into Self-Employment
Often the best way to start your own business is to try to set it up in your spare time while still working in another job (ideally part-time). This will allow you to test the water and establish networks of suppliers and customers while still having money coming in to support yourself. If you can work from home initially, this will avoid the costs of leasing premises until you have something established.
Sometimes a group of graduates will get together to form a partnership upon leaving university. This allows you to draw upon the skills of the individual members. Many people will go into business for themselves after gaining initial experience and/or professional training with a larger employer: this is common in fields such as accounting and professional services. One way of running your own business with the support and benefits of a large organisation is franchising - see the section below.
Careers Where You Can Work for Yourself
Website Designer, Programmer
IT Consultant, or SEO Consultant
Database or Web Development Consultant
Programmer, Designer
Hairdresser, Nail Designer
Wedding or Dating Agency
Professional Photographer, Camera Private Film Maker
Freelance Journalist or Interpreter
Recruitment Consultant
Technical or Text Author
Artist (Parties, Celebrates, Holidays)
Graphic or Photo Designer
Theatre, Show Company Producer, Executive Producers (Parties, etc)
Television Producer, Clip Maker
Courier (Car, Bike, etc)
Running a Shop
Running a Hotel or Exclusive Private Residence
Running a Restaurant, Coffee Shop, Sandwiches Bars
Exhibition Organiser
Bookkeeping and Accountant
Barrister
Teacher of English as ANY Foreign Language, Literature
Freelance Translator or Interpreter
Life coach
Sports Coach, Sport Club, Fitness Centre or Yoga Centers
Massage and Spa Center
Complementary Therapist
Marketing Communications
International Dating and Wedding Centers
Flights and Travel Agencies
Exterior Design and Interior & Furniture
Cakes and Drinks
Garden Inspired Designs and Home Flower Design
Gifts and Jewellers
Home and Office Cleaning
Babysitters
Check: Does Your Work Make You Self-Employed?
It's important that you find out quickly whether or not you're self-employed. You may have to pay a penalty if you don't tell us soon enough. (The rule is: after the end of the calendar month in which you began self-employed work, you then have three calendar months to notify the Inland Revenue - after that you may have to pay a penalty). The questions below should help you to decide your employment status; please read through them and choose the link that best fits your situation. They are only a brief guide and don't cover every situation. They are for guidance only and reflect the tax and National Insurance position at the time of writing. They do not affect your right of appeal about your own tax or National Insurance circumstances.
If you can answer 'Yes' to the following questions, it will usually mean you are self-employed: -
Do you have the final say in how the business is run?
Do you risk your own money in the business?
Are you responsible for meeting the losses as well as taking the profits?
Do you provide the main items of equipment you need to do your job, not just the small tools many employees provide for themselves?
Are you free to hire other people on your own terms to do the work you have taken on? Do you pay them out of your own pocket?
Do you have to correct unsatisfactory work in your own time and at your own expense?
Remember, if you have a salaried job you are employed in that job, but legally you can be self-employed at the same time. For instance, you might earn an extra income through part-time work at evenings and weekends that would count as self-employment.
If you can answer 'Yes' to the following questions, you are probably employed: -
Do you have to do the work rather than hire someone else to do it for you?
Can someone tell you at any time what to do or when and how to do it?
Are you paid by the hour, week, or month? Can you get overtime pay?
Do you work set hours, or a given number of hours a week or month?
Do you work at the premises of the person you work for, or at a place or places he or she decides?
Rules That Apply to Particular Jobs and Positions
Some rules apply for special situations, such as working through an agency, or being a company director. Are you affected? If your are, please speak to your local Status Inspector or Status Officer. They are responsible for enquiries and decisions about employment status.
What is Self Assessment?
The key features of Self Assessment include: -
A current year basis of assessment;
One set of payment dates for tax not paid at source;
One main point of contact for your tax affairs;
Fixed, automatic penalties for late returns, and interest and surcharges for late payments;
Clear obligations for keeping records.
An important feature for self-employed taxpayers is the introduction of the current year basis of assessment. The starting date for this depends on when you started your business. Under the old system, your tax assessment was based upon your trading profits for the 12 month period ending in the tax year before the year covered by the return. There were complicated rules at the start and finish of the business.
This changed under Self Assessment. Tax is now calculated on the profits arising in the tax year itself. If your accounting period is different from the tax year, then tax will be calculated on the profit arising in the 12 month accounting period ending in the tax year. The system is simpler, particularly for businesses that prepare accounts to 31 March or 5 April. It ensures that over the life of a business as a whole, the total profits assessed to tax exactly equal the total profits made.
As existing businesses moved to the current year basis, there was a year, 1996-97, in which accounts caught up with the year that was taxed. So the profits that were assessed for 1996-97 would be the average of the two sets of accounts ending in 1995-96 and 1996-97. If you became self-employed or your business partnership started on 6 April 1994 or later you will have been taxed from the start on the current year basis.
How Does Self Assessment Affect You?
You are self-employed if you are in business on your own and do not operate through a limited company. This might involve supplying goods or services through a one-person business or a business employing others. You will also be self-employed if you are a partner, either in a large partnership or with only one partner. For more information on partnerships see Partnerships. If you are self-employed, you have always needed to fill in a tax return. This has not changed and if you work for yourself - that is, you are self-employed or in partnership you will need to complete a Self Assessment tax return. The general principles for Self Assessment are the same for everybody. But the different sorts of income and gains you have affect which supplementary pages of the tax return you need to fill in.
The key features of Self Assessment include: -
A current year basis of assessment;
One set of payment dates for tax not paid at source;
One main point of contact for your tax affairs;
Fixed, automatic penalties for late returns, and interest and surcharges for late payments;
Clear obligations for keeping records.
What Records Should I Keep?
Until recently there was no legal requirement to keep records for income tax, although Customs & Excise require registered traders to keep records for VAT. However, HM Revenue and Customs have always advised businesses that it was in their own interests to keep all the records needed to help prepare accounts and tax returns. Rules introduced in the 1994 Finance Act mean that you now need to keep all appropriate records.
HM Revenue and Customs will normally expect you to: -
Record all sales and other business receipts as they come in, and retain the record;
Keep back-up records, for example, invoices, bank statements and paying-in slips to show where the income came from;
Record all purchases and other expenses as they arise, and ensure - unless the amounts are very small - that you have, and retain, invoices for them;
Keep a record of all purchases and sales of assets used in your business;
Record all amounts taken out of the business bank account, or in cash, for you or your family's personal use;
Record all amounts paid into the business from personal funds, for example, the proceeds of a life assurance policy.
You will have to retain your records for five years from the latest date by which your tax return is to be filed.
How Do I Complete and Send Back My Tax Return?
If you are self-employed you will need to fill in: -
The core Tax Return (SA100) ;
The self employment supplementary pages (SA103) ;
Any other supplementary pages which apply to you.
Your Self Assessment tax return pack includes a step-by-step guide on how to fill in each section of your return together with a guide on how to calculate your tax if you want to. Note: You will not be sent the Tax Return Guide (SA150) Tax Calculation (SA151W or SA151C) if you send in your return electronically or your agent/tax adviser sends in your return.
How and When Do I Pay My Tax?
You will need to pay any tax due by 31 January after the end of the tax year covered by the return. You may also have to make two payments on account for the tax year before the return for that year is due. Payments on account will be made on: 31 January in the tax year and 31 July after the end of the tax year (six months later).
If these two payments amount to more or less than the tax which actually becomes due for that tax year, then a balancing payment (or repayment) will be due on the following 31 January. Essentially, your business income is counted alongside your existing personal income, so the accounting side of your business will be very straightforward. As the name suggests, you will be personally liable for any debts you incur in the running of your business which you wouldn’t be under the limited company route.
In terms of accounting, you will need to submit an annual self assessment form to the Inland Revenue and keep accurate and up-to-date records of all business transactions and accounts. You will also be pay income tax on all profits and pay national insurance contributions on those profits. Losses can be offset against tax on other income. In the April after your business starts, the Inland Revenue will send you a Self Assessment tax return to fill in. The Revenue will also use the return to assess any profit-related (Class 4) NI contributions you may need to pay.
Self-Employed people are also liable for Class 2 NI contributions (currently £2.30 per week). Class 2 NICs are payable by all self-employed people, whether they are fully or partly self-employed, unless they have a Small Earnings Exception certificate because their income is below a certain level. This level is £4,825 for 2008/09.
How Much Will You Pay on Account?
If you calculate your own tax, you will also calculate your own payments on account. Each payment on account will be one half of the income tax bill for the previous year after deducting tax paid at source, e.g. PAYE. If HM Revenue and Customs calculate your tax for you, they will also tell you if you have to make payments on account and how much. You will not need to make payments on account: -
If your income tax bill for the previous year was less than £500.00;
More than 80 per cent of your income tax for the previous year was paid by deduction at source, e.g. under PAYE;
For Capital Gains Tax.
In some circumstances, you can ask to reduce your payments on account.
Information to Help Start, Grow or Manage a Small Business
Coddan offers assistance and resources for those running or starting a business in England, Scotland and Ireland: so, you have a brilliant idea. You are going to set up in business. What form should your business take and what should you call it? The form of business this article looks at is the limited company. To many people the idea of a limited company is complex and forbidding; yet 400,000 new companies are registered at Companies House each year. So, it is a popular vehicle for people to use in running their business. They may not choose it as the way to start their business off, but it's clear that an awful lot of business people see it as a good way to operate. Why?
Safety
A limited company is a legal person in its own right and has an existence separate from the people who incorporate it. Anyone doing business or making contracts does so with the company, and not the people running it.
The shareholders of a limited company (that is, the owners) are protected from personal responsibility for the company's debts, with their risk limited to the amount they invest. Of course, banks lending money to the company may ask for personal guarantees where they don't feel the company's own assets will cover the amounts they are lending.
Company directors are treated as employees but they do have legal responsibilities. In return for limited liability, companies must show the world that they are run properly and who by. The way they do this, is by filing information about themselves (an Annual Return) and their company's financial performance (its accounts) at Companies House. This is important because it allows people who may do business with the company to have confidence in the company's ability to deliver and in the people they are dealing with.
Kudos
Many people feel that having the word limited at the end of their company name creates a good impression, and that, being a company director, rather than a simple business person, they will carry more weight with potential business partners, suppliers or customers.
This may be true, but don't forget that the world of limited companies is a world of give and take. You may have good stuff on your letterhead but is your record at Companies House up to date? Apart from the information contained in documents registered at Companies House, the fact of filing what you are supposed to file, when you are supposed to file it, says a great deal about your ability to organise and run your company.
Again, many people find all this daunting. But if we look at accounts, the Companies Act gives private limited companies ten months to file - there are automatic penalties for filing late. If proper records have been kept during the financial year, drawing up a set of accounts should not be impossible in this time; and 96% of the 1.6 million registered companies manage to file accounts (even if some are a bit late). If proper records have not been kept, then how do know if you're making money?
Growth
Business people have different needs at different times. As we said earlier, not everyone starts off in business with a limited company. An idea may need time to develop into something needing the structure of a limited company to continue to support growth, supply existing markets and develop new ones. This is something that can only be judged through time and experience.
Names
Naming a company is often fraught with difficulty. It is very important that you should not become emotionally attached to one particular name before checking that it is available both as a company name and as a domain name. Only one limited company can be registered with a given name. If registered names are very similar, then the first registered company might object to the new company's name and it might have to be changed. So do some research, check the names index on the Companies House website to make sure that the name you are thinking of has not been registered. A lot of Internet service providers have facilities for you to check the availability of domains.
Make sure you have several options that reflect what your company will do and the impression you want to create. Remember that for many people, your company name will be the first thing they know about you. Take time to make certain it says the right things about your company and that it is distinctive.
Small Business and Home Business Ideas and Advice: Location of the Business
Where do you want to operate your business? Location can be extremely important, especially for non specialised businesses: -
Where do your potential customers live?
What is your catchment's area?
Do they need to visit you?
How are you going to deliver to your customers?
Is there enough storage/office/working space?
Is there convenient parking/public transport for customers and staff?
If, for example you are selling retail bulky items, choosing a location with convenient car parking is preferable to that of a street where vehicles are prohibited. If it is situated on a road frontage, an advantage is that your premises can be a highly visible advertisement for your business. If customers/suppliers need to come to your premises, is there easy access, do double yellow lines, or zebra crossing zigzags or one-way streets matter?
It can be helpful to be located close to another premises, which whilst not a competitor, can bring customers to you. An off licence next to an unlicensed convenience store with parking on a busy commuter route could compliment both traders.
If working from home, is it suitable for potential clients to visit?
Will family life disrupt your ability to work?
Is there enough room?
Do your deeds/lease/mortgage/rental agreement permission to work from home?
Do you require planning permission?
You will almost certainly need to inform your insurance company.
If customers/ suppliers/staff are going to visit your home, then you will probably require additional public insurance, as you are most unlikely to be covered under your normal household/buildings/contents insurance, and especially for public liability.
Business Premises: To Rent, or Purchase - Lease or Freehold?
This decision may often be easily made, through lack of finance, the unavailability of suitable premises in your desired location etc. It is helpful for you to have an idea of what you would prefer before you go looking! The very basic advantages/disadvantages are:
Rent: a low cost method of starting a business. You may not be able to change/adapt the building in the future. You will not usually have premises to 'sell on' at the end of your tenure.
Freehold: You have a property which you own, and which may appreciate in value over time. It may also loose its value, due to a decrease in the market, planning or development changes in your area. It can be tax efficient to purchase as part of your pension arrangements. It will be an initial major expense/borrowing which you may not be able to afford. A suitable property may not be available at the time you need it.
Leasehold: a lower cost method of purchasing the rights to a building, which can be sold on, often at a premium, to another person, providing the agreement has sufficient time left.
Rent: the following questions should be considered by anyone considering renting a commercial property: -
What is the rent?
When is it payable and how often is it reviewed?
How much notice do you have to give/be given?
What is the rateable value?
Will your business affect this?
Are there any restrictions on your use?
Is the building listed or in a conservation area?
What is the extent of any repairs/renewals that you will be liable for internally?
Can you redecorate the interior, at will?
Whose responsibility is it to maintain the exterior?
Do you have to contribute?
Are you liable for the cost of all services?
Are any shared?
Are there any communal services, for which you may have to contribute?
Is there sufficient electricity/gas/plumbing/heating/computer/telephone points?
How easy is it to add additional items, and is there sufficient capacity to cope with your requirements?
What are you permitted to install, alter, and remove without the landlord's permission?
If you make substantial alterations, will you be able to recover any costs at the end of your tenure?
Will any neighbouring businesses affect/disrupt your operation?
It is advisable to have a detailed schedule of the building prepared, either in agreement with the landlord, or by a professional, for your protection.
Leasehold: when purchasing a lease, from an existing leaseholder, you will have to pay a premium for the lease, possibly the value of any fixtures and fittings, often the landlord's legal fees for dealing with the transfer to you, and the cost of any stock. Once completed you then become legally liable for the terms of the lease, even if you cease trading! You do not actually own the building at any stage, just the right to use it in accordance with the lease! It is therefore worth having the building checked by a professional, to assess the condition of the building/services, so that you can then negotiate suitable reductions in the price/rent etc, if you are to repair/replace these.
A lease is a formal legal document, which you become fully liable for once signed. Ensure that you have received advice, from qualified professionals, before you sign. It is advisable to have a detailed schedule of the building prepared, either in agreement with the landlord, or by a professional, for your protection. You will usually be responsible for leaving the building in the condition you found it, at the end of your lease.
Freehold: this is a building that you own outright, when purchased, and are free to sell whenever you wish. Before purchasing, you are advised to have searches made, by a professional, to check that no building/planning/road layout/development is planned for your area, which might have a bearing on the future use of your property. You are also advised to have a full structural and services survey, to assess the condition of the building, the value, plumbing, electrics etc. If there are any problems, then this can be reflected in the purchase price.
How much will it cost to insure the property?
What is the rateable value, and will your business affect this?
Actual cost of rates?
Are there any restrictions on your use?
Is the building listed, or in a conservation area, and how may this affect you?
What is the extent of any repairs/renewals that you will be liable for internally and externally?
How old and what is the state of services provided?
Are the services all yours, or any communal?
Is so, what is your potential liability?
Is there sufficient electricity/gas/plumbing/heating/computer/telephone points?
How easy is it to add additional items, and is there sufficient capacity to cope with your requirements?
Are the floors sufficiently strong to take the load bearing you require, the doors wide & high enough, and the floor areas clear of obstructions and of suitable height?
Will any neighbouring businesses affect/disrupt your operation?
Are the doors/access large enough for your present and foreseeable requirements, or can they easily be modified?
Can the building easily be made secure, internally and externally?
Insurances
These may vary, but you will almost certainly require insurance, even if you are working from home. In the case of rented/ leasehold premises, it is quite usual for the owner to take out a policy on the building and for the tenant to pay the premium!
The property itself;
The Fixtures & Fittings;
The Stock;
Have liability cover for your staff, and customers, if appropriate.
You will also have to comply with any detailed requirements specified by your chosen insurer. Appropriate security measure taken by you can often reduce the premium you pay. For those working from home, check if your home policy covers you, and your business contents. Often it does not. You will almost certainly require additional cover if you are having people visiting your home in connection with your business, to cover them. These are the basic policies, and additional policies can be taken out to cover sickness/death of key employees, private medical cover and so on. These may not always be affordable, particularly in the initial stages of a business, but may be highly for when you can.
Office
The following questions are essential for finding the right office for your business: -
Is the floor area and layout suitable for your purposes? If not, can it easily be modified?
Can the floor take the weight of any stationery, books, equipment etc?
How easily can heavy equipment/stationery be taken into your office?
Is there room for a suitable reception area?
Is there room to speak with clients/customers in privacy?
Can you easily carry/ install heavy stationery/equipment?
Is there a service lift, if you are not situated on the ground floor?
Is there convenient parking for customers/visitors/staff?
Is there sufficient sockets/outlets/capacity for your requirements in these areas, and would the present equipment be adequate & cost effective for your needs?
Is there the capacity to install additional outlets cheaply and easily if required?
What is the age and condition of any wiring/installations?
Can it cope with your requirements in the short/medium term?
Check on where the sun shines, and at what time? May this cause a problem?
Are the doors/access large enough for your present and foreseeable requirements, or can they easily be modified?
Is the window display area suitable for your requirements, can it easily be altered if required, and are you allowed to advertise on the windows/building?
Is there room to install a staff kitchen/rest room?
Do you require modifications to comply with The Disability Act?
Working From Home
This can be a quick, easy, and low cost foundation on which to build a business. You should be mindful of any effect on your neighbours, as well as distractions for you that could interfere with your work. So it is worth asking yourself the following questions: -
Are you permitted to operate a business from home? (check your deeds/ rent agreement/ lease/ covenants)
Do you require planning permission to use your property for business?
Do you have enough room to operate your business, without interruptions? (i.e. children, pets, neighbours)
Do you have the discipline to work at home without allowing yourself to be distracted?
If you own the building, could you be liable for business rates?
How would this affect your liability for Capital Gains Tax?
Would your business cause any interference to your neighbours? (hours of work, type of work, deliveries, equipment being used etc.)
Have you the necessary insurance cover for you, your staff, equipment and stock, clients and visitors, as well as the property itself?
Is there sufficient room for vehicles to a park or drop off deliveries?
Do you have sufficient storage space?
Does the property have suitable security measures? (alarm, fencing, CCTV, etc.)
Employment and Contracts
When employing staff you cannot discriminate at any stage of the recruitment process (apart from a very few limited exceptions) on the grounds of race, sex, (including gender reassignment), marital status, sexual orientation, religion, belief or disability. If taking over an existing business, you may be required to take on all the existing staff under TUPE rules, which usually means that you have to abide by their terms and conditions of employment, (except for pension arrangements). There are many ways of finding potential staff: -
Word of mouth;
Local Advertising (including on the premises);
Local newspapers;
Job Centres (people often look in a job centre to see what jobs are available, and then apply directly to the business, bypassing the job centre);
Specialist publications (for specialist skills);
Agencies.
It is essential to allow enough time to recruit the correct staff. Staffs are expensive, and you need to recruit staff that will be assets to your business. Poor staff can be a liability, and may affect the growth of your business. There can be advantages to employing part-time staff (flexibility, less national insurance payments), and temporary staff (cover for busy periods/holidays etc). It might be prudent to employ some staff on a temporary/short-term contract basis first. This way, you can see how good they are, before employing them on a permanent basis. If you employ any staff, there are many factors to be considered, (employment law, minimum wages, holidays, sickness, compulsory time off to look after children etc at short notice, national insurance, rest/lunch breaks). You must also ensure that you don't discriminate on any of the grounds listed above.
You may need check on the qualifications and experience of your proposed staff, as not all applicants are as honest as they may seem. You need to allow time for such things as notice periods, training, for them to gel as team before you start.
Your staff can literally, make or break your business, as they are the public face of the business. Even if they do not meet customers, the way they communicate by telephone, answer a query or deal with suppliers or customers, can make the difference between your success or failure. You need to be aware that staff can cost you additional money and problems over and above their wages/salaries. Payments over a certain amount a week can incur a National Insurance charge on an employer. You may not be able to recover all the 'private' costs for the use of vehicles etc. You have to allow for provision for maternity/paternity cover, parental time off without warning and a whole raft of other employment legislation.
Contracts of Employment
An employment contract exists as soon as a job offer is accepted, even if it is not written. The terms of the offer can be written, spoken or implied by the nature of the job on offer, or a combination of all three. If an employee will be with you longer than a month, you must draw up written terms and conditions, and give a copy to the employee within two months. It is advisable to give an employee a contract of employment before they start work. It should contain information on the following basic structure (with extra information as needed): -
When the employee started;
Number of working hours per week;
When they may reasonably be expected to work;
Rate of pay;
Holiday entitlement;
Employers name and address;
Place of work;
Job description;
Length of notice both you and they may give;
Details of rest/lunch breaks;
Details of any dress code/requirements, and smoking, drugs & alcohol policies;
Disciplinary and appeal procedures;
Employment legislation which may be pertinent.
Information from you as the employer such as: -
Sickness procedures
Paternity/Maternity leave
Rest Break rules
Night working
Time off for other than annual leave etc
Trade union rights;
Rights of Part time workers;
Flexible working rights.
Having this in place is for both the employer and employees' protection.
Bookkeeping and Administration
Good bookkeeping of all your records is essential, and a legal requirement. All your business records must be kept for at least seven years. The VAT, Inland Revenue, Wages Inspectorate organisation and others, have the right to come and inspect your records. Some have draconian powers of investigation.
An investigation into the affairs of your business can prove to be very costly, stressful and time consuming. All these can have an adverse affect upon your business. If you are not good at administration, or if you are busy running other aspects of your business, it is essential you have a competent person overseeing this area. Buying at the wrong or uncompetitive prices, being overcharged, or charged for items and goods not received, does all too frequently occur. Late payment of invoices can also be a big problem, as it can cause havoc with your cash flow.
Difficulty in assessing your VAT, not reclaiming your VAT due to you and failing to pay suppliers on time can also prove problematic. Suppliers, customers and even a business's own staff and will take advantage of businesses whose administration is poor; therefore you cannot afford complacency in your administration. Being paid late and not sending your own invoices out on time can prove to be very costly to a small business. If money doesn't come in on time, how will you be able to pay your suppliers and staff?? Are you losing customers because of it? If you are known to have financial difficulties, you can lose customers and suppliers.
Having inefficient administration and not knowing your profitability and loss is one of the easiest routes to failure!
Protection of Staff and Customers
You will be breaking the law if you do not provide a safe working environment for your staff, and your customers. This will vary enormously according to the business and its location. You will also need to supply, depending upon your business, suitable: -
Contracts of employment;
Protective clothing and equipment;
Fire and safety equipment;
Hygiene equipment;
COSHH (Control of Substances Hazardous to Health) Reports;
HACCUP (Hazard Analysis and Critical Control Points) Reports;
Risk Assessments Reports;
Hygiene Certificate trained staff for catering operations;
First Aid trained staff, depending upon the size/type of your business;
Mandatory Signage.
Security and Insurance
For safety and to reduce internal and external, theft, it may be advisable to fit: -
Tills;
Safes;
CCTV (Closed Circuit Television) ;
Administrative procedures, checks & audits;
Cash, cheque control & transfer procedures;
Stocktaking;
Safety, night lighting;
Alarms, panic buttons;
Internal & external lighting;
Barriers & shutters;
Bollards.
You will require the following essential basic insurance, at least: -
Public liability insurance;
Third party liability insurance;
Employee liability insurance.
You may also require these too: -
Building insurance;
Fixtures and fittings insurance;
Stock and goods insurance.
You may want to consider the following insurances, for yourself and certain employees: -
Critical life/life insurance;
Key person insurance;
Private medical insurance;
Employment tribunals;
Tax and VAT investigations.
From a personal perspective it is important that you have made a will. The absence of a will could result in a financial outcome that could be both costly and problematic for your business.
From time to time even the best-run business needs some advice or a second opinion. Healthy businesses plan for the future and having an independent review of your strategy can really help - our consultants act as advisers to many industry sectors and can offer you the benefit of having seen what works and what does not. Using the best accounting, budgeting, planning, and reporting tools, we can ensure that you have all the information you need to face future challenges.
For overseas companies setting up in the United Kingdom, our experience of business practices, taxation, and law within the United Kingdom can save them the considerable time, money, and energy required to establish and grow a business while meeting all of their legal obligations. We can also act as trustees for pension schemes, or alternatively, we can audit your pension scheme accounts, guiding you through the minefield of reporting requirements.
We are always looking for opportunities for your business to reduce its tax liability, with proactive tax planning. We also advise clients on international corporate tax and on issues arising from cross-border transactions, into and out of the United Kingdom.
If you are unsure of the best course of action for your business, Coddan can advise you on the best location and type of business entity, and can tailor a solution to your needs. If you wish to retain Coddan in a professional capacity, you can apply for an initial consultation appointment by following the link below. Book an initial consultation:use this form to request an initial consultation with one of our specialists
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Setting up as a self-employed sole trader is the simplest and quickest way to start a one-person business. This is our most popular package with UK residents, who has a valid permission to live and work in the United Kingdom, and includes:
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However, your very first small-business decision may be to admit that you are not ready for this career - at least not yet. If you are straddling the fence, Coddan CPM will uncover whether this career works for you. You will also gain insight into getting your personal finances in order before exposing yourself to the risk of a new business, and discover how to draw a roadmap to reach your career destination. This easy-to-understand guide is also for those who want to start a new business. Coddan CPM provides independent and impartial business advice, an extensive range of services for small firms and private individuals to help to start-up new businesses. 
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This isn't a suitable way to trade if you want to hire employees or your business grows so big that there's a long way to fall if things go wrong. Remember, you're totally liable for everything to do with the business. 
Coddan offers assistance and resources for those running or starting a business in England, Scotland and Ireland: so, you have a brilliant idea. You are going to set up in business. What form should your business take and what should you call it? The form of business this article looks at is the limited company. To many people the idea of a limited company is complex and forbidding; yet 400,000 new companies are registered at Companies House each year. So, it is a popular vehicle for people to use in running their business. They may not choose it as the way to start their business off, but it's clear that an awful lot of business people see it as a good way to operate. Why? 