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.
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 company formation specialist offering prompt service and expert advice who can help you 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.
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.
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.
This package includes: Registration as a self-employed in 2-3 weeks Practical advice and guidance to help you get your business off the ground Initial consultation free-of-charge Preparation and submission of the appropriate forms to Inland Revenue to obtain National Insurance Number and PAYE Provision of specialised account books, seals and other stationeries (additional fee) Payment of legal and initiation fees The following documents will be posted to you (these documents will be sent via Royal Mail): Written confirmation letter from the Inland Revenue
Business Start-Up: Legal Requirements
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, eg John Doe, or use another business name, eg AAA Business Marketing. 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 (£61,000 from 1 April 2006) you will normally have to register for VAT. You pay Class 2 NICs at a flat rate of £2.10 a week (2006-2007) if your earnings are above £4,465 per year. Bear in mind that Class 2 NICs do not count towards the additional State Pension, Statutory Sick Pay or Jobseeker's Allowance. 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.
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 neighbor's, 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.
To start a business you will need to choose or create a business plan. While this is an obvious step many people who want their own business don't have an idea, just the desire to be an entrepreneur. For the budding entrepreneur, there are many options; buying a franchise or an existing business, or looking to others for ideas for a start-up business. Once you have decided on the business you wish to start, then the real work begins. The simplest form of business entity is the sole proprietorship. If you choose this legal structure, then legally speaking you and the business are the same. Establishing a sole proprietorship is cheap and relatively uncomplicated.
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We also answer your business questions by running a website and a telephone call handling centre (between 9:30 AM and 17:30 PM, except holidays): 0800 081 1510 or +44 (0) 207 637 3881, fax: +44 20 7681 3318. We may answer your questions at our main office in central London (W1, 5 Percy Street) - free of charge for first-time business starter entrepreneurs. Our consultants and business start-up advisors speak English, Spanish, Italian, and Russian. Please do not hesitate to contact us directly and apply for a meeting with us if you have any questions. We see too many investors who might have avoided trouble and losses if they had asked basic questions from the start. If you would like to arrange a meeting to discuss how to start your own business, tips on funding, employing people and the biggest causes of failure for start-ups, please contact us.
It does not matter if you are a beginner (small or new business start-up questions - your first knowledge search answers are free of charge!) or have been investing for many years (professional questions about tax planning, business planning, tax optimisation cannot be answered free of charge); it is never too early or too late to start asking questions. It is almost impossible to ask a dumb question about how you are investing your money. Do not feel intimidated. Coddan CPM offers assistance and resources for those running or starting a business in England, Scotland, Northern Ireland or Republic of Ireland. Coddan CPM also offers business-planning, companies incorporation, accounting and consulting services in USA and offshore countries.
Start a Business in England, Scotland or Ireland, small business advice, business planning in London (UK), Edinburgh (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.
Of the four million businesses in the UK, over 99% are 'small' (0-49 employees), according to government data. 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: 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:
Sole Traders:
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. 8. Directors can be corporate bodies or private individuals. 9. A Director can be of any nationality. 10. All companies must appoint a company Secretary who can be of any nationality.
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. 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. It is worth spending time considering which set-up company format is best for you. As a sole trader, you will not need to notify Companies House, nor deal with any administrative or accounting requirements which are required of Limited Companies. 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. There are some exceptions and special rules for particular industries, like the construction industry.
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 £2.05 per week). If your income from self-employment is low (below £4,215 in the tax year 2004-05), you may be able to apply for the Small Earnings Exception. 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.
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 £61,000. Your annual turnover is normally the total amount of money coming into your business from the goods or services you sell. You can read our Complete Guide to VAT.
Self-Employed Advantages: Easiest and least expensive form of ownership to organize Flexibility - no requirement for registration or filing documents 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.
Self-Employed Disadvantages: 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 May be at a disadvantage in raising funds and are often limited to using funds from personal savings or consumer loans Fewer State benefits and tax reliefs are available Weak structure 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 Limited Company
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. We have several guides and calculators that can help you through this process. Alternatively you can make an appointment with one of our consultants.
Everyone starting out on their own needs to register with HM Revenue & Customs. 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. In addition, if you are unemployed now, do not forget to tell the Jobcentre. For More Information About Being Self-Employed:Contact Us Online or call us at (+44) 0207 637 3881. To speak with a representative, please call between 9:30 am and 17:30 pm any business day.
Do I 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.
If you are self employed you will have to complete a self assessment tax return and pay over the first instalment of your tax liability to the Inland Revenue by 31 January each year. Coddan CPM can complete your self assessment and prepare your company accounts: self assessment only - from £125.00 (depending on the complexity of your return). Self Assessment Tax Return and Accounts preparation - from £300.00 (depending on the complexity of your return). For More Information About Accounting and Bookkeeping, Please Click:PAYE, VAT & Accounting and Bookkeeping Service
You can read more on our site about the Limited Company route and for general taxation guides, please try our dedicated the tax section. You should register the moment you start out as a sole trader; otherwise, you will incur a penalty of £100.00 if you do not register within three months. When you start working for yourself, you will need to register as self-employed with the Inland Revenue - we may do it for you! If You Are Thinking About Becoming Self-Employed:E-mail Your Questions to Us
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. How Do I Apply? Do I Need a UK Visa?
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 affects 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 (LP) 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 LP 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 LP are the ones who are responsible for the obligations of the LP.
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): An LLP is similar in some ways to a standard 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, LLP's are only recommended for profit running businesses.
An LLP may be formed by two or more persons (individuals or companies, and not necessarily UK resident) 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.
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 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.
LLP Disadvantages: Disclosure: 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 Regulation: auditing and filing requirements.
If you are unsure about any aspect of forming an LLP, seek professional advice from your solicitor, accountant or LLP formation agent. For more information about LLP creation and incorporation service, please e-mail info@ukincorp.co.uk, alternatively you can make an appointment with one of our consultants or: call FREE 0800 081 1510 or +44 (0) 207 637 3881, fax: +44 20 7681 3318.
Our fees for our LLP incorporation package are £125.00 and include the following items: LLP registration, Companies House filing fees, bound copy of the completed LLP Agreement. Coddan specialising in incorporation of Limited Liability Partnerships in England, Wales, Scotland and in Northern Ireland. Our incorporation service which ENABLES YOU TO APPOINT YOUR OWN members and registered office details straight away. Your LLP is then submitted for registration with your choices as the original LLP officers. (Note: All partnerships are formed with your own details from the time of incorporation; we do not use nominees as some agents do. We do not register partnerships which have sensitive words free of charge). You May Use This Form to Incorporate a New Limited Liability Partnership: Economy LLP Registration Package
CHOOSING THE BEST OWNERSHIP STRUCTURE FOR YOUR BUSINESS: LIMITED COMPANIES
A 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.
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.
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.
Coddan specialising in incorporation of Private Companies, Companies Limited by Guarantee, Charities, Public Companies, Partnerships (in England, Wales, Scotland and Ireland incl. Republic of Ireland) and secretarial service. If required, we can provide a registered office facility (we are offering registered office addresses in London, registered office in Edinburgh and Glasgow, and in Birmingham, virtual and serviced offices in London, Windsor, Slough, Glasgow, Aberdeen etc.
Do you want to incorporate a new Private Limited Company using YOUR OWN Directors, Secretary, Shareholder and Registered Office? You have come to the right place. Coddan™ (Coddan is the trading name of Coddan CPM LTD (project of Coddan Holdings (UK) LTD) - online new business incorporator offering same day company creation with no paper form filling, cheap, fast and easy new legal entities incorporation. We offer help and advice with starting a business, business development, financial planning, raising finance, corporate recovery, payroll, company formations and secretarial services.
Coddan deal with new or existing business ventures in the United Kingdom and elsewhere, UK property deals, and private client matters as follows: advice on business structures, their acquisition and disposal, formation of company, partnership, trust or hybrid business structures, directorship and shareholders services, business bank accounts, agreement and statement drafting, advice and representation in personal and business visa and immigration issues, etc. I Want to Calculate My Order: This Interactive Form Will Calculate Your Company Costs and Shipping
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 advisory service 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 statutory accounts preparation. Let us know what your needs are.
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 NI liabilities Daily bank reconciliation of 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.
Why Use This Service? 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 are unsure about any aspect of registering a company, seek professional advice from your solicitor, accountant or companies formation agent. For more information about company creation and incorporation service, please e-mail info@ukincorp.co.uk, alternatively you can make an appointment with one of our consultants or: 0800 081 1510 or +44 (0) 207 637 3881, fax: +44 20 7681 3318.
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.
Above £40,000 you will look to save around £4,000-£5,000 more.
Being a 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 Ltd 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 brings 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
Business Name: 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 Jewelers 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 Me? 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 £2.05 per week). If your income from self-employment is low (below £4,215 in the tax year 2004-05), you may be able to apply for the Small Earnings Exception. 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.
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? (Check your deeds/agreement/lease) 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 ratable value? Will your business affect this? Are there any restrictions on your use? Check especially opening/access times, and signage Is the building listed or in a conservation area? How may this affect you? 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 neighboring 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.
What is the rent? When is it payable, and how often is it reviewed? You will usually have to pay the insurance rent to the landlord, for his arranging the building insurance on your behalf. How much and when? What is the ratable value? Will your business affect this? What is the actual cost of rates? Are there any restrictions on your use? Check especially opening/access times, covenants, use, sub-letting, signage? 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? Is the building in the right location? Is the building listed, or in a conservation area? How may this affect you? 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? How old and what is the state of services provided? Are you liable for the cost of all services, or are any shared? 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 or 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 neighboring businesses affect/disrupt your operation? Are there any communal services, for which you may have to contribute?
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? Check especially the deeds for any covenant restrictions on: opening/access times, use, sub-letting, signage? 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 neighboring 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 yourneighbors, 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,neighbors) 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 yourneighbors? (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?)
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/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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Business Start-up for Beginners
£ 25.00
This package includes:
Registration as a self-employed in 2-3 weeks
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. 
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. 
+44 (0) 141.530.8188 
+44 (0) 289.099.8744 
Easiest and least expensive form of ownership to organize 
If you are unsure about any aspect of forming an LLP, seek professional advice from your solicitor, accountant or 
Do you want to incorporate a new Private Limited Company using YOUR OWN Directors, Secretary, Shareholder and Registered Office? You have come to the right place. Coddan™ (Coddan is the trading name of Coddan CPM LTD (project of Coddan Holdings (UK) LTD) - online new business incorporator offering same day company creation with no paper form filling, cheap, fast and easy new legal entities incorporation. We offer help and advice with starting a business, business development, financial planning, raising finance, corporate recovery, payroll, company formations and secretarial services. 
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. 
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? 
