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Businesses

BUSINESS START-UPS

If you are considering starting a business you will need advice on various aspects. You may not be an expert in the legal and financial implications of running a business - but Clairwood Accounting is here to help to :

  • Decide on the most suitable structure for your business - whether you should be a sole trader, a partnership, a limited company or a limited liability partnership
  • Assist in preparing a business plan, cashflow projections and budgets
  • Complete any necessary registration procedures with HMRC and Companies House
  • Advise you on bookkeeping systems and software, VAT, payroll and other accounting requirements
  • Help with all aspects of business compliance and administration

ANNUAL ACCOUNTS

All businesses need to prepare annual accounts, whether the business is a sole trade, a partnership, a company or an LLP. We understand that as this is a requirement for HMRC and, in the case of companies and LLP’s, also for Companies House, that clients would like this compliance service carried out in a cost-effective manner.

SOLE TRADER OR PARTNERSHIP

You can establish your new business without limited liability by trading as a sole trader, or joining with others, as a partnership. There are no registration fees for setting up as a sole trader or partnership, and you will be classified as self-employed with HM Revenue & Customs. This means that you will be required to submit self-assessment tax returns which will include the figures from your accounts. These accounts do not have to be filed with Companies House.

You will have complete control of your business and how it functions – however this does not go without risk. Sole traders and Partners are personally liable for any of the business’ debts and you need to ensure that, where possible, your home and personal assets are protected.

Clairwood can support you allowing you to focus on developing your business. With all the complexities of legislation, and the constant changes of the tax regime, we aim to ensure your tax liability is minimised as far as legally possible.

LIMITED COMPANY AND LIMITED LIABILITY PARTNERSHIP

If you establish your business as a Limited Company or a Limited Liability Partnership, you need to understand how they differ from a sole trader or partnership.

There are a number of potential advantages to using a Limited Co. or an LLP structure. Where a number of business proprietors are involved many people find it easier to regulate their business relationship through a Limited Co. or an LLP rather than a un-limited partnership. A business interest represented by shares can be transferred simply and can make succession tax planning easier. Acquiring limited liability is in itself an important consideration. However, that aside, many individuals prefer the perceived status that goes with trading as a Limited Co or an LLP rather than trading under their own name as a sole trader or partnership.

Apart from the above, a primary reason for incorporation of a small business has always been the possibility of saving tax and national insurance contributions.

It must also be appreciated that choosing to operate as a limited company or LLP means you will have an increased compliance burden. These are both completely separate legal entities, which exist in their own right, and are subject to various rules and regulations.

A LTD CO pays Corporation Tax on its profits. The profits remaining after tax can be distributed as dividends to the shareholders.

If Company directors and employees are paid salaries, these must be processed through a payroll.

A LTD CO has Shareholders and an LLP has Members. These are the investors who own the business.

Members of an LLP are taxed on their share of the LLP profit as self-employed persons through their Self-Assessment Tax Returns.

For further advice on any of the above and for assistance setting up a Limited Company or an LLP, please contact us today.