Business Start-Up Checklist

A number of discussions in the past week with people also thinking about starting up their own business.  So lets assume that the business plan is shiny, you know where the clients are going to come from and all the figures add up.  Now you have to set up your company …. what next.

Company Set Up – in my earlier post I described that I used a Company formation agent.  You do not have to do this and can successfully do this on the forms available at the Companies House website.  You will need to decide 1) Who the Director(s) will be 2) Whether you will have a company secretary  3) Where your registered office will be and will you use your home address and 4) How many shares and who the shareholders will be.

Bank Account – you will need a bank account.  There are a number of free banking offers out there at present e.g. 2 years at RBS/Natwest; 18 months at Lloyds TSB and some free Sage Software etc.  You need to decide what suits you.

Accountant – see earlier post on Professional Services. Decide if you retain the services of an accountant to do tax, VAT etc 

VAT – Are you going to register for VAT.  If your turnover is >£70k per annum then you have no choice and if you register remember that you need to charge 17.5% VAT on all your invoices.  In addition should you join the Flat Rate VAT Scheme or keep calculate your VAT through income and expenditure records?

Corporation Tax – You (or your accountant) need to register your company for Corporation Tax.  A return will need to be completed annually and Corporation Tax is due 9 months after you company’s period end date.

Insurance – As soon as you start trading you could be sued if you do something wrong.  Make sure you get insured early on.  You should consider 1) Professional Indemnity Insurance – to insure you against negligence in your actions / advice 2) Public Liability Insurance – to insure you if third parties have suffered as a result of your actions and 3) Employer Liability Insurance to insure against claims by an employee for injury (although this is not required if you are the only employee)

Your Pay – If you are going to receive a salary a PAYE scheme will need to be set up with HMRC.  You need to discuss with your accountant how much you should pay yourself as a salary and how much should be paid as dividends from company profits.

Invoicing –   When you invoice your first client make sure you include 1) Invoice Date; 2) Invoice Number; 3) Company Name, Address and registration number; 4) VAT Number and 5) itemized breakdown of charges.  

Expenses – Consult your accountant to find out what expenses you can claim in the operation of your business.

Finally, if you are starting your own business, Good Luck