Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

    • Beatle Ray
    • By Beatle Ray 5th Dec 17, 3:58 PM
    • 149Posts
    • 38Thanks
    Beatle Ray
    New business, some general help please
    • #1
    • 5th Dec 17, 3:58 PM
    New business, some general help please 5th Dec 17 at 3:58 PM

    Have just been informed that my company I work for will be closed down in January 2018, I have been here for 35 years so expect to walk away with approx. 25K in redundancy, I have already been told I will be paid off, only to expect the minimum though, however given that what I do, marketing, is all I have known and what to take some of my clients I deal with solely to start on my own, most will be fine with that and I expect to turn over approx. 200K.

    Given I can't tell any of the clients yet what should be the first things I should look to do, I will need to be VAT registered as most of the people I deal with require that, I will need an accountant, what is the best way of finding one and given the level of turn over what sort of fee can I expect from them, I'm confident in my ability to do the work but its the biz admin side that I will need to get to grips with, I expect to be working from home to start with, i'll be using my redundancy to fund the company and cover the cash flow, have no debt to speak of and the wife does have an income stream but do need an income of course, all advise greatly received, thanks in advance
Page 1
    • pramsay13
    • By pramsay13 5th Dec 17, 4:16 PM
    • 363 Posts
    • 797 Thanks
    • #2
    • 5th Dec 17, 4:16 PM
    • #2
    • 5th Dec 17, 4:16 PM
    Decide on your business model e.g. ltd company, sole trader etc.
    Choose a name and start setting up a website etc.
    I'm not sure how you can know what your turnover will be without knowing what you will charge your clients.
    When will you be able to tell them the situation? That's only a month away and as a client I would want as much notice as possible if a company I work with is closing down.
    • spadoosh
    • By spadoosh 5th Dec 17, 4:20 PM
    • 5,136 Posts
    • 6,884 Thanks
    • #3
    • 5th Dec 17, 4:20 PM
    • #3
    • 5th Dec 17, 4:20 PM
    Firstly youll probably (might) have something in your employment contract that states you cant essentially steal customers. Given you want to walk away with a redundancy payout, it could be a quick way of losing it if your employer finds out. Just be careful and wary of this. In reality if the business is shutting it shouldnt be a problem but you never know.

    You dont need to be VAT registered until your turnover actually hits 85,000. Ill be surprised if any business requires you to actually be VAT registered.

    You probably dont need an accountant either very few businesses do. But like builders personal recommendations are usually best. All the isntructions you will need are on theHMRC website.

    The .gov and HMRC websites are a good place to start. Trawl through and absorb what you can, more or less covers the basic do's and dont's of business.

    Do you know any business owners personally? The speciality of the business is usually irrelevant but having a good discussion about day to day activities of a business will help you learn that aspect.

    Your in a semi good position in that your being made redundant and whilst immediately bad theres usually offers and incentives for training or gaining experience. Keep an eye out for anything you can take advantage of. Same with government incentives/business classes locally.
    Don't be angry!
    • Beatle Ray
    • By Beatle Ray 5th Dec 17, 4:28 PM
    • 149 Posts
    • 38 Thanks
    Beatle Ray
    • #4
    • 5th Dec 17, 4:28 PM
    • #4
    • 5th Dec 17, 4:28 PM
    Thanks for the replies, the company have said I can keep my clients I work on, the income is 10% of the turn over, I have under estimated the figure, one client is spending 100K so I know I have the potential with about eight smaller ones spending approx. another 100K between them
    • 00ec25
    • By 00ec25 5th Dec 17, 6:57 PM
    • 6,379 Posts
    • 5,888 Thanks
    • #5
    • 5th Dec 17, 6:57 PM
    • #5
    • 5th Dec 17, 6:57 PM
    Thanks for the replies, the company have said I can keep my clients I work on, the income is 10% of the turn over, I have under estimated the figure, one client is spending 100K so I know I have the potential with about eight smaller ones spending approx. another 100K between them
    Originally posted by Beatle Ray
    then I very much disagree with the previous posts, you certainly need to see an accountant to explore your options and get advice, particularly if you want an income directed "at" your wife.

    also based on your info it may be wise to simply VAT register from the outset as it sounds like you will have to do so within 12 months anyway.
    • Pennywise
    • By Pennywise 5th Dec 17, 7:00 PM
    • 10,037 Posts
    • 18,612 Thanks
    • #6
    • 5th Dec 17, 7:00 PM
    • #6
    • 5th Dec 17, 7:00 PM
    As said above, you don't need to register for VAT until your turnover has hit 85k over any past rolling 12 month period, so probably won't need to register until towards the end of 2018. I can't imagine why any of your customers would demand you were VAT registered, but having said all that, if they're all going to be vat registered businesses, you may well be better off by voluntarily registering from day one.

    If your 200k is realistic, you'd probably be better off as a limited company from day one too.

    If you don't know anyone who currently uses an accountant, you could talk to 2 or 3 as most will give a free intro consultation so then you'd find out prices, services and how well you "gel". Given the turnover proposed, and the potential for being both a ltd co and vat registered, I'd say an accountant is beneficial unless you have a lot of time and energy to research it all yourself. You could well find that a good accountant could save you more than their fees if they help you avoid mistakes and/or missing some tax saving opportunities.
    • trailingspouse
    • By trailingspouse 5th Dec 17, 8:45 PM
    • 2,680 Posts
    • 4,342 Thanks
    • #7
    • 5th Dec 17, 8:45 PM
    • #7
    • 5th Dec 17, 8:45 PM
    In order to run a business, you need to know how to run a business. Being able to do the actual work is the easy part - most businesses that fail do so because they got the 'business' bit wrong.

    First, write a business plan.

    Second, shop around for accountants. They basically charge by the hour, so the more work you can do for them the less they will charge you - if you turn up at the end of the year with a carrier bag of receipts you can expect to be charged more than someone who has it all laid out on a spreadsheet and all the receipts cross referenced. Our accountant gave us a fixed charge for the first year - no matter how often we rang them or how many problems they had to sort out for us, they wouldn't charge us any extra. I found that really useful. An accountant will advise you as to whether you should become a ltd, or a sole trader.

    Third - set aside at least half a day every week for the admin side. Every week. This is the day you send out invoices, check that invoices have been paid, chase unpaid invoices, do your VAT return, reconcile your bank statements, file your receipts, update your cashbook and generally sort everything out. I find it best to keep three separate accounts - one is the main business account, and all monies come and go from that account. I also have a Corporation Tax account, so every time I pay a dividend I put 20% in there, and I have a VAT account so every time I receive VAT on a remittance it goes straight in there. No nasty surprises, and the money is earning a bit of interest (a teeny weeny bit, but hey).

    I hope everything works out for you.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

405Posts Today

4,201Users online

Martin's Twitter
  • It's the start of mini MSE's half term. In order to be the best daddy possible, Im stopping work and going off line?

  • RT @shellsince1982: @MartinSLewis thanx to your email I have just saved myself £222 by taking a SIM only deal for £7.50 a month and keeping?

  • Today's Friday twitter poll: An important question, building on yesterday's important discussions: Which is the best bit of the pizza...

  • Follow Martin