Planning the set up

A checklist of financial and taxation issues to consider

Our initial meeting

We offer a free initial meeting to help you review your plans, to advise you on the most appropriate form of financial structure and plan the next steps.

The initial business plan

You should come with your initial business plan. This can be quite short and simple. It needs to state:

• The type of product or service that you will supply.
• The source of the product or the skills required to provide the service.
• The type of customers and how you will sell your service to them.
• The basis of pricing and whether that will produce sufficient income to pay the business expenses and leave you with a reasonable profit for your efforts.

Do not try and sell on price. In the long run, established businesses will be able to beat you on price. Your business has to be more convenient, more personal, more flexible or better quality. You need to be clear about why your customers will want to use your business.

Type of business structure

If it is your business alone, you have a choice of trading as a sole-trader or limited company. If you are working with others it can be in partnership, as an LLP or a limited company. We can help you make the right choice.

We can help you register with the appropriate authorities and explain when and how you will pay tax.

Accounting records

It is vital to have good accounting records and we can advice on the most appropriate system. Accounting records need not be complex. For some businesses, a book is quite sufficient. For most new businesses, spreadsheets are better.

Accounting software is only useful if you have a large number of similar transactions, particularly if you are selling on credit. Avoid one of the ?home finance? computer programs. These do not adapt well to business use. Recently, online accounting systems have become economical. These can be accessed from any location using a standard web browser. In principle, they are useful if you will spend a lot of time away from base or you want us to have simultaneous acess to your records to handle VAT returns or mor complex transactions. So far, online accounting systems are unusual.

Opening a business bank account

The smallest sole trader businesses can manage without a business bank account. However, if you have a reasonable number of transactions or are trading in partnership or through a limited company, you will need a business bank account.

Staff and sub-contractors

If you need assistance, it is tempting to pay for help on a casual or ?self-employed? basis. It is fine to genuinely sub-contract part of the work to another business. However, if the reality is that someone is working as one of your staff you must deal with them properly. If you get caught out breaking the rules, it will prove an expensive mistake. The complexities of employing staff and running a payroll are daunting and so it is tempting to close your eyes to the rules.

Payroll calculations are complex and it is almost always worthwhile outsourcing the work. We operate the payroll for about a hundred clients and the cost is modest.

The Business Link website is an good source of information It has an excellent tool for generating a terms and conditions of employment that meets all the rules.