November 6th, 2014Starting up a new business? Three things for you to get wrong
Are you thinking of taking the plunge and starting your own business? Or perhaps you have already started working for yourself.
It can be a daunting prospect and a confusing time when entering into the world of self-employment.
Here are a few mistakes which we’ve come across when talking to people who are thinking of or have just started in business
1. I am running my business I am therefore a limited company
Many people can be under the misconception that they automatically have a limited company when they start a business and they call themselves a company. This is not the case; In order to have a limited company, a company needs to be incorporated with Companies House. You can’t just call yourself a limited company.
Others think they have to be a limited company and they must set up a limited company straight away. This is not always the best option for individuals and it’s always best to talk to an accountant to first discuss which is the best business structure for you to operate your business under.
2. I am now in business I must charge VAT on my invoices
When you raise invoices you only charge VAT if you or the company is VAT registered. Depending on your situation and the industry in which your business operates in, you may wish to voluntarily register for VAT. Or it may be that you have to register for VAT if you know that your turnover is going to be above the VAT registration limit.
3. I can do my own accounts myself
It is true… you can prepare your own accounts. However, time is extremely precious when you run your own business. If you have to take time out of your day to produce bookkeeping records and doing numerous searches on Google for “free” advice, think how your time could be better served.
Whatever size your business is, you and your business can always benefit from having an accountant. When you first start up in business an accountant can help you with:
Tax planningManaging cash flowHow to maintain your recordsExplaining what expenses you can and cannot claim.Ensuring deadlines are met by providing reminders of key deadlines throughout the year Keeping the business on track for profits and budgetsAnd, of course, an accountant can also be a great source of contacts for the business community. It can be lonely when you’re on your own.
If you have any questions about starting up in business email Jonathan Ford and Co and we’ll be happy to help.
