The main questions we are asked relate to taxation or regulatory issues. Examples of questions we are commonly asked are:
• How do I form a limited company?
We have online access and can form a limited company for you within 24 hours. Alternatively, you can contact a company formation agent to carry out the process.
• Who do I need to register with when I start my business?
HM Revenue & Customs should always be informed when a new business commences, or there is a change in circumstances, whether you are operating as a sole trader, as part of a partnership, or through a limited company. We have a lot of experience in these matters and will guide you through the process, completing and filing all the relevant forms for you.
• Should I trade as a limited company or as an individual?
There are many factors such as what your expectations are for the future, how you prefer to operate, and the level of remuneration you require on an ongoing basis.
We will discuss the alternatives with you at a very early stage and advise you of the advantages and disadvantages, including the taxation aspects.
• Should I register for VAT?
The current annual turnover limit for which you are required to register for VAT is £70,000. It may be beneficial to register before the limit is reached, however, and we will advise you accordingly. The limit normally increases after each budget.
We will complete the VAT registration forms for you and ensure you are registered under the correct scheme, for example under the flat rate scheme or annual accounting scheme.
• How do I pay myself from my limited company?
As a director of a limited company, you are treated as an employee. As such, any remuneration should be withdrawn as a salary or dividend.
There are usually tax benefits to paying yourself a combination of salary and dividend, depending on your personal circumstances, and we would discuss the different options with you.
• How should I maintain my accounting records and what do I need to record?
It is important to ensure a sound and accurate accounting system is maintained as soon as your business starts to trade. This can either be a computerised package, spreadsheets or a manual system. The number and complexity of transactions are factors that determine which type of system should be used, but it also depends on what you are comfortable with, if you are to maintain the system yourself.
We have advised a number of our clients as to the best accounting system to use, and usually review the records after a short period to ensure they are accurate, and that they are happy with the system. There is no additional cost to you for this exercise.
• What are my responsibilities as a director?
As a director, you are appointed by the shareholders to run the company on their behalf. For the majority of clients we deal with, the directors are also the shareholders. A director is responsible for ensuring annual accounts are filed with Companies House, together with other documents including annual returns, and changes in officers.
Although it is your responsibility as a director, we would offer to file accounts and statutory documents with Companies House on your behalf within the deadlines, and do so for all limited company clients for whom we prepare the accounts.
• How much tax do I need to pay and when?
Private limited companies usually pay corporation tax 9 months after the end of their financial year at the small companies rate.
Sole traders and partners pay income tax by 31 January and 31 July based upon profits from their business.
We will advise you how much tax to pay based upon your company profit or profit from self employment/partnership. We will also remind you in good time of your tax liability.
We are able to advise you on all these issues, and more, and are always happy to discuss your queries with you.