New Biz - Accountant & VAT Returns

tekton23
tekton23 Posts: 138 Forumite
First Anniversary Combo Breaker First Post
in Small biz MoneySaving
Hi,

My wife and I have just set-up a new ltd, for an online tutoring service. We are both self-employed and have our own ltd and sole trader companies, that are separate to this, so are fairly experiences in working with accountants and filing etc.

For the first 6 months for this new venture, we will have only a handful of transactions going through the account <10 or thereabouts. We will need to do VAT returns.

Can anyone suggest how to keep costs as low as poss, for both filing the VAT and keeping accounts in order. I do not want to pay circa £50-75 /month in online accountancy fees until we have more income in 6 months or so, with a view to keeping startup costs as low as possible.

Any tips or suggestions gratefully received.

Thanks,

t23

Comments

  • MEM62
    MEM62 Posts: 4,746 Forumite
    First Anniversary Name Dropper First Post
    tekton23 wrote: »
    We are both self-employed and have our own ltd and sole trader companies


    Your stating point is to decide what kind of entity you are. You cannot be a sole trader and a Ltd Company.
  • Mistral001
    Mistral001 Posts: 5,349 Forumite
    First Anniversary Name Dropper First Post I've been Money Tipped!
    edited 10 January 2020 at 5:15PM
    tekton23 wrote: »

    Can anyone suggest how to keep costs as low as poss, for both filing the VAT and keeping accounts in order. I do not want to pay circa £50-75 /month in online accountancy fees until we have more income in 6 months or so, with a view to keeping startup costs as low as possible.

    Any tips or suggestions gratefully received.

    Thanks,

    t23

    Do not become registered for VAT until you reach the VAT turnover threshold and secondly stay as a sole trader.

    It depends on the business of course but you asked about saving accountancy fees. My two suggestion could save you accountancy fees

    BTW you can have multiple businesses and have multiple employees as a sole trader.
  • J_B
    J_B Posts: 6,433 Forumite
    Name Dropper Photogenic First Post First Anniversary
    MEM62 wrote: »
    Your stating point is to decide what kind of entity you are. You cannot be a sole trader and a Ltd Company.


    Me & Mrs B are both 'self employed' (does that make us sole traders?)
    We are also both co-directors of our own Ltd Co
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    why do you think you "need" to be Vat registered when you are already concerned about accountancy fees?


    I assume your customers will be private individuals, not vat registered businesses, so the last thing you want to have to do is increase your price by 20% because you are charging Vat
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    J_B wrote: »
    Me & Mrs B are both 'self employed' (does that make us sole traders?)
    We are also both co-directors of our own Ltd Co
    depends how many trades are being conducted and by whom?

    many one or two person companies forget they are employees of their own company, and so are often confused and think they are "self employed" because they are working for "themselves".

    they are not, they are working for their company, which is an entity in its own right and employs them to do the company's work
  • DigForVictory
    DigForVictory Posts: 11,905 Forumite
    Name Dropper First Anniversary Photogenic First Post
    tekton23 wrote: »
    My wife and I have just set-up a new ltd, for an online tutoring service.
    Congratulations & I wish you the best of luck! New businesses are good for the economy.
    tekton23 wrote: »
    For the first 6 months for this new venture, we will have only a handful of transactions going through the account <10 or thereabouts. We will need to do VAT returns.
    Will you? Your new business is going to turn over 85K in 6 months? As if not, you do Not Need to be VAT registered although I cheerfully admit it is wonderful for the cashflow, as you can reclaim a load of startup costs. If however those startup costs will be lower than the accountant, be prepared to forgo one to forgo the other?

    Have you a VAT registered client who insists on dealing with other VAT registered suppliers?

    Have you bomb-proofed the VAT liability of supply of education? As hazily something somewhere is telling me it's exempt (a whole new & gruesome kettle of fish for which an accountant is Worth Every Tuppence.) I could be wholly wrong & tutoring is value added & standard rated but please, CHECK?
  • J_B
    J_B Posts: 6,433 Forumite
    Name Dropper Photogenic First Post First Anniversary
    J_B wrote: »
    Me & Mrs B are both 'self employed' (does that make us sole traders?)
    We are also both co-directors of our own Ltd Co
    00ec25 wrote: »
    depends how many trades are being conducted and by whom?

    many one or two person companies forget they are employees of their own company, and so are often confused and think they are "self employed" because they are working for "themselves".

    they are not, they are working for their company, which is an entity in its own right and employs them to do the company's work


    The Ltd Co is a separate entity - we currently take no income from it.
    We both work part time, she from home and me 'out and about' as an 'independent contractor'
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.1K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.2K Work, Benefits & Business
  • 607.9K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards