Need Help Regarding New Business

matty117

Hi,

I'm currently employed by Npower and for the forseeable future, I'm about to set up my own business as well though. So what do i need to do about registering my business and paying VAT and National insurance for that business?

Many Thanks

xylophone

http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073858805

PlutoinCapricorn

You need to decide whether to register as a sole trader or create a limited company before you go into anything else.

What sort of business will you be running?

matty117

It will be designing software and selling it

antonic

You have two choices about the legal entity you want to trade as, and both have their advantages & disadvantages

1) Sole Proprietor

Cheap and easy to set up BUT if you run into problems with HMRC regarding Self Assessment / VAT debts your personally liable for them and you could most probably do the books yourself.

2) Limited Company

Costs to set up a Company, and by law you MUST have at least 1 Director & a Company Secretary, the advantage of a Co is that if you run into VAT/PAYE/CT debt problems the debt belongs to the Company and NOT to you.
This is more expensive as I would recommend you get a PROPERLY qualified accountant, who has a GOOD reputation, to do the books (but you can deduct his fees as a business expense).

Hope this helps.

PlutoinCapricorn

It seems that registering as a Sole Trader would be your best option.

HMRC expect you to do this only when you have your first assignment or made your first sale, not in advance on the offchance. You can register online via the HMRC website. You need to decide whether you want to trade under your own name, or a business name: if the latter, you will need a business bank account.

Reading through Businesslink will give help you a lot: you may need product liability insurance for example. Then you can come back here for specific questions,

HMRC do free courses for self employed people, which will help you understand the requirements.

Maiden98

Costs to set up a Company, and by law you MUST have at least 1 Director & a Company Secretary

Actually, since Apr 2008, a company does not HAVE to have a Company Secretary.

John_Pierpoint

Does a company still require at least two shareholders?

If malfeasance is discovered, which shareholder does the law approach in the initial instance?

Maiden98

I deal with a lot of companies that only have one shareholder. As for malfeasance, it would be the director/s responsible, not the shareholders.

John_Pierpoint

Precisely, but traditionally the real owner was MD and owned 99% of the shares and his wife/accountant/mother/etc. was nominally the company secretary and owned 1% of the shares.

So now an individual can be a company too !

[So much easier to run a crooked operation, when you don't need the agreement of another being - probably makes the "pre-pack" method of unloading debt easier too]

http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1087521544&r.l1=1073858805&r.l2=1085161962&r.l3=1073865730&r.s=sc&type=RESOURCES

http://en.wikipedia.org/wiki/Pre-packaged_insolvency

Maiden98

Yeah true. Though several of the companies that I helped to set up 10 years ago had Director with 100% of the shares with wife/mother etc as secretary with no shares.