Across all sectors, there were 407,505 new businesses registered in 2020 in the UK. It is a dream of many to be their own boss. Indeed, there are many benefits of owning your own business: independence, flexibility, and the financial reward of a successful enterprise. However, there is much to consider when setting up a new business. We’ve outlined a few key considerations for entrepreneurs.
Tax rules for the self-employed
If you start working for yourself, you must register with HMRC by 5th October, following the end of the tax year in which your self-employment starts. You can register online, by phone, or by post. It is important to note that tax rules are different for self-employed people, and it requires plenty of forward planning. Learn more about the tax system for the self-employed here.
After making the life-changing decision to be your own boss, it is vital that you decide the best legal and taxation structure for your company. The structure that works best for your enterprise will depend on your personal situation and your future plans. You can choose to be a sole trader, partnership, limited company, limited liability partnership, or a co-operative. To learn more about the options available, please click here.
Hiring employees is a big responsibility. Without the right employees, a business cannot succeed. If you’ve never hired staff before, we recommend that you read our informative factsheet on taking on staff. We provide information on how to recruit the right people for the job, properly conduct interviews, and outline regulations you must follow as an employer.
Insuring your business will provide you with compensation should anything happen. Some insurance is compulsory, such as employers liability insurance for employees and motor vehicles liability insurance. Other categories of insurance are optional but will provide you with both peace of mind and protection. For example, public liability insurance is not compulsory but protects you from claims relating to damages to third parties. Property and theft insurance is also recommended should anything happen to your business premises. Learn more about the types of business insurance you should consider here.
If you plan to start your own business, you need to keep detailed records of all transactions made by you or to the company. These can be kept by hand, but we would recommend using cloud software, such as Xero or Quickbooks which are straightforward to use and keep all your records in order. Bulley Davey is here to help you navigate the increasing accounts preparation legislation and provide you with a clear understanding of your financial position. We can offer a range of services to make your life easier, including bookkeeping services, management of your payroll function, VAT services, as well as budgeting, forecasting and financial modelling.
How can Bulley Davey help?
If you are starting or have recently started a business, the Bulley Davey team will be happy to discuss your plans and help you get started to give you the best chance at success. Please contact us to discuss your situation in more detail.
To learn more about starting a new business, please read our informative factsheets.