Starting in Business

Avoiding commercial tax pitfalls

Starting in business is never something that should be taken on lightly, but if you have the right product or service and the right approach, the rewards can be considerable.

To make the best possible start to your new business, you should consider carefully the following questions:

• Have you prepared an objective business plan?

• Do you know how much money you need to start your business?

• Do you need to raise any business finance and if so, do you need any assistance with this?

• Are you fully aware of the legal requirements placed upon you as a business proprietor?

• Have you considered how to market/advertise your business?

• Would a partnership or a limited company be a better option than being a sole trader?

• Have you considered what would happen to your business if you were unable to work, for example through ill health?

• Are you and your family prepared for the level of commitment required to succeed in business

If you are unsure on any of the above, we strongly recommend that you seek proper professional advice as soon as possible.

Initial checklist

Here's a checklist of some of the more common matters that can be easily overlooked at the start of a business and during the all-important first year:

1.	Business bank account opened
2.	Assets introduced into business valued and listed
3.	Appropriate business insurance cover in place
4.	Correct business stationery in use
5.	Proper books and records being maintained
6.	Choice of accounting date considered
7.	VAT registration considered
8.	Tax Office notified
9.	National Insurance Contributions Office notified (Since  January 2001 there has been a requirement to notify commencement of self employment within 3 moths of starting.  Failure to do this may result in a fine of £100).
10.	Local Authority notified
11.	PAYE (or subcontractors) scheme considered

The above list is not exhaustive and not all of the points will apply. It should, however, act both as a reminder and a prompt to seek further guidance where necessary.

Conclusion

There is a great deal of paperwork required in the correct running of a business, however small that business may be. Spending too little time on such matters can lead to serious problems (particularly with organisations such as the Inland Revenue), whereas spending too much time may lead to the business itself suffering. This is where good professional support is absolutely essential.