Finding an accountant

Whilst pulling my hair out on search engines to find an accountant based in West Yorkshire who specialises in the design industry... John came up with a pretty simple but effective solution... ring up design studios around Leeds, ask to talk to their account team... and then ask for recommendations.

So far I have rung up B&W design who said that their accountant is nowhere near West Yorkshire (which was interesting) and have e-mailed Vikki at Turnkey Design. 

I then contacted the Director of Analogue Design in Leeds... after a slightly awkward conversation he gave me a recommendation.
A good one. 

So we have decided on an accountant firm called Thomas Coombs & Son based in Leeds.

Business Start-Up

Most people who start up in business do so because they have a good business proposition. We can help by evaluating your ideas and helping you develop them into a viable business.

We will help you:

• decide on the most suitable structure for your business (i.e. sole trader, partnership, limited liability partnership or limited company)
• prepare a business plan, cash flow projections, budgets and trading forecasts
• assess your finance requirements and advise on the most appropriate source of financ
• help you establish relationships with banks and solicitors and any other necessary professional advisers
• carry out registration procedures with Companies House and H M Revenue & Customs
• set up an internal accounting system

Public Liability Insurance

When this task first started... immediately I started thinking meerkats... singing go compare... and saying "confused?!?!?!" to myself... yes. Good advertising. And it worked. 

Confused.com gave us several different quotes and outlined what they each would cover. 

We opted for... 

These were the results...

I now need to decide on one. 

I think that paying an extra £400 or so a year is not worth insuring our equipment abroad as this comes under our travel insurance. 

And we definitely need insurance for goods in transit in case something goes wrong delivering work to clients. And loss of revenue. 

So realistically... Ageas is the only one to cover all of our needs. 

This seems to be a very good deal overall. 

This is the summary of the policy. 

Information on starting up a new business if you have never had one in the UK.

Open publication - Free publishing - More business

Thoughts on finance so far...

So these pages have really helped me to understand all the financial aspects of both starting a business and keeping it going over time. 

I have signed up to businesslinkyorkshire so that I can access more parts of the site which will help in my investigation. 

I also need to... find us the perfect accountant. 

Find us an insurer for personal liability insurance and travel insurance

Build up a business plan

Although our studio space which we rent covers insurance, it does not cover personal liability insurance. It essentially covers possessions but not people. 

This is important to have as anything could go wrong and could result in us losing a lot of money. 

Business Link - Equity Finance

Equity Finance

What is equity finance?

Equity finance is a way of raising money in return for a share of your business. The investor would probably also expect to have some control over the way the business is run.

You will not usually have to pay interest, or return the money by a certain date. Instead, your investor expects to benefit from dividend payments.

You will need a professional and compelling business plan to successfully apply for equity finance.

Who provides equity finance?

The two main providers are:

• business angels; and
• venture capitalists, also known as private equity firms.

Business angels are wealthy people who will often invest in a new or growing business.

Venture capitalists usually provide significant amounts of money for rapidly growing companies that will eventually float on a stock market.

What are the advantages of equity finance?

• Equity finance may be available if your bank will not provide a loan.
• You will not have to pay interest on a loan and can use spare cash to invest in the business.
• An external investor may bring invaluable knowledge and experience to your business.
• Business angels can make fast decisions about whether or not to invest.

What are the disadvantages of equity finance?

• You may not wish to give up a share in your business or control over the decisions you make.
• Business angels can be hard to find.
• Dealing with venture capitalists can be a long and complex process, and will involve the payment of legal and accountancy fees – even if your application is unsuccessful. 

Business Link - HMRC

HMRC

What is the role of HMRC?

HM Revenue & Customs  (HMRC) is responsible for:

• collecting direct and indirect taxes;
• paying child benefit, the child trust fund, and tax credits;
• border protection;
• environmental taxes;
• the minimum wage; and
• student loans.

HMRC will need to know about your business, its legal structure and if you employ anyone. This is to ensure you pay the correct taxes and National Insurance.

 

Can I deal with HMRC online?

 

Yes. From registering a new business and filing your tax return through to downloading forms and keeping up to date with the latest business laws, HM Revenue & Customs’ website is an invaluable resource for your new business.

For further information see our guide Online transactions with government.

Register for online services with the Government Gateway on the HMRC website.

Business Link - National Insurance

National Insurance

What National Insurance will I have to pay if I am self-employed?

 

You will pay:

• Class 2 contributions at a flat weekly rate (£2.40 for tax year 2009-10)
• Class 4 contributions as a percentage of your taxable profit 

If your earnings are expected to be less than a certain amount (£5,075 for tax year 2009-10), you may not have to pay any Class 2 contributions. This is known as the ‘small earnings exception’ or ‘SEE’.

 

You must keep your tax and National Insurance records for five years.

 

What National Insurance will I have to pay if I set up a limited liability partnership?

 

Members of a limited liability partnership must pay Class 2 and Class 4 National Insurance contributions.

 

What National Insurance will I have to pay if I set up a limited liability company?

 

Company directors are classed as employees and must pay Class 1 National Insurance contributions.

 

What National Insurance will I have to pay if I set up a franchise or social enterprise?

 

This will depend on the legal structure of your business.

 

What National Insurance will I have to pay for employees?

 

You are legally responsible for sorting out the National Insurance contributions of employees. You will also need to keep detailed National Insurance records.

 

You should take your employees’ Class 1 National Insurance contributions directly from their salary, and pass these payments to HMRC.

Business Link - Pensions

Pensions

What sort of pension can I have?

 

You should ensure that your pension will provide enough income for your retirement – and never rely on the proceeds of the sale of your company to finance your retirement. As a business director or owner, you could consider:

 

• Executive pension plan (EPP)
• Self-administered scheme (SAS), also known as investment regulated schemes
• Self-invested personal pension plan (SIPP), also known as investment regulated schemes
• Employer-financed retirement benefit scheme (EFRBS), a type of unregistered scheme with fewer tax benefits

For information on registered schemes view our guide Choose the right pension scheme - registered.

 

For information on unregistered schemes view our guide Choose the right pension scheme - unregistered.

 

Do I have to provide a pension scheme for my employees?

 

If your business has five or more employees the law says you must provide access to a stakeholder pension scheme (unless your business is exempt). You do not have to contribute towards the scheme, but you can if you wish.

 

To find out more about your legal obligations to employees visit the The Pension Service website.

 

Should I provide an employee pension scheme, even if I don’t have to?

 

Providing an employee pension scheme could be very advantageous for your business. Morale and loyalty are encouraged, and pension schemes help to attract and retain high calibre staff. In addition, substantial tax relief is available.

 

Do I need to consult a professional pension adviser?

 

Pension laws can be complicated. You will need to find out what pension will be best for you and for your employees – and what your legal obligations as an employer are.

Business Link - General Tax

General Tax

What tax issues might I need to consider?

 

• VAT
• PAYE (Pay As You Earn)
• Corporation tax 

Do I have to register for VAT?

 

Our page on VAT provides a detailed summary on the question.

 

What do I need to know about PAYE?

 

If you become an employer, you will need to deduct PAYE income tax (and National Insurance) direct from your employees’ salary. You will have to pass these payments to HMRC on a monthly, or in some cases quarterly, basis.

 

View our guide Introduction to PAYE for employees for further information.

 

Will I have to pay corporation tax?

 

If your business is set up as a limited company, you will have to pay corporation tax on your profits.

 

The following organisations also have to pay corporation tax:

• members' clubs, societies and associations
• trade associations
• housing associations
• business co-operatives and similar types of organisations

You must: 

• tell HMRC that your company exists and is liable for corporation tax
• complete a company tax return every year
• pay on time to avoid financial penalties
• keep records of your company’s income and outgoings