| We are a firm of Chartered Accountants in | | | | need to register for VAT. As Chartered Accountants |
| Southampton offering key advice on business startup. | | | | in Southampton we can help register you for VAT. If |
| It is the ambition of many people to run their own | | | | the value of your taxable sales or services exceeds |
| business. Some may have been made redundant and | | | | the registration limit you will be obliged to register. |
| find themselves with free time and financial resources. | | | | Expect a visit from HMRC within eighteen months of |
| Others make the decision to start up in business to be | | | | registration. This inspection of your records ensures |
| more independent and obtain the full financial reward | | | | VAT is being properly accounted for. |
| for their efforts. | | | | Employing others |
| Whatever the reason, a number of dangers exist. | | | | For the business to get off the ground or to enable |
| Probably the greatest concern is the possibility of | | | | expansion, it may be necessary to employ staff. |
| business failure. | | | | It is the employer's responsibility to deduct income tax |
| Read on for guidance on some of the factors which | | | | and national insurance and to account for student loan |
| need to be considered before trading begins. | | | | deductions. The balance must then be paid over to |
| This fact-sheet cannot cater for every possibility and | | | | HMRC. Payroll records should be carefully maintained. |
| any decisions should be supported by professional | | | | You will also need to be familiar with employment law. |
| advice. | | | | Premises |
| Initial Considerations | | | | There are many pitfalls to be avoided in choosing a |
| In order to make your business a success there are a | | | | property. Consideration should be given to the |
| number of key factors which should be | | | | following:suitability for the purposecompliance with legal |
| considered:commitment- starting a business is | | | | regulationslocal by lawsphysical restrictions such as |
| demanding. Determination and enthusiasm are | | | | access. |
| essentialskills- you will need managerial, financial, | | | | Insurance |
| technical and marketing skills. If you do not have these | | | | Comprehensive insurance for business motor vehicles |
| skills personally, they can be found in a partner or | | | | and employer's liability insurance are a legal |
| employee, or acquired through trainingyour product or | | | | requirement. Other types of insurance such as public |
| service should have a proven or tested market, but | | | | liability, consequential loss, business assets, Keyman |
| must not conflict with the patent or rights of an existing | | | | and bad debts should be considered. |
| business. | | | | Pensions |
| In addition to these general considerations there are a | | | | Putting money into a pension scheme can be a very |
| number of more specific matters. | | | | attractive way of saving for retirement because of |
| Taxation | | | | the favourable tax rules. Many companies have to |
| When starting in business, taxation aspects must be | | | | provide access for their employees to a stakeholder |
| considered. Power Accountax are Chartered | | | | pension. |
| Accountants in Southampton , offering key taxation | | | | How We Can Help |
| advice. | | | | As Chartered Accountants in Southampton whilst |
| Taxation on profits | | | | some generalisation has been made by us about |
| The type and rate of taxation will depend on the form | | | | starting up a business by us, it is always necessary to |
| of business structure. However, the taxable profit will | | | | tailor the strategy to fit your situation. Any plan must |
| normally differ from the profit shown in the accounts | | | | take account of your circumstances and aspirations. |
| due to certain expenses which are not allowed for tax | | | | Whilst business success can never be guaranteed, |
| purposes and the timing of some tax allowances. | | | | professional chartered accountants advice can help to |
| National insurance (NI) | | | | avoid some of the problems which befall new |
| The rates of NI contributions are generally lower for a | | | | businesses. We would welcome the opportunity to |
| sole trader or partnership than for a director of a | | | | assist you in formulating a strategy suitable for your |
| company but the entitlements can also differ. But in a | | | | own requirements. We can also provide key services |
| company, it may be possible to avoid NI by paying | | | | such as bookkeeping, management accounts, VAT |
| dividends rather than salary. | | | | return and payroll preparation at an early stage. |
| Value added tax (VAT) | | | | For information of users: This material is published for |
| Correctly accounting for VAT is an essential part of | | | | the information of clients. It provides only an overview |
| any business and neglect may result in a significant | | | | of the regulations in force at the date of publication, |
| loss. | | | | and no action should be taken without consulting the |
| When starting a business you should consider the | | | | detailed legislation or seeking professional advice. |