Buying a business, need a few pointers please
Discussion
I'm buying a taxi business. It's well established and turns over between £100 and £150k a year. Three cabs.
I would like some help choosing the following:
a) Bank account
Don't necessarily need an overdraft facility, but if I did probably only £2k max. Currently bank on line with Intelligent Finance, and have a second account with HSBC. Would you go with HSBC or is there something better that won't rape me with charges? Have a good history with both. Internet not really an option because of the large amount of cash being paid in regualrly.
b) Mobile phones
Need four handsets all with bluetooth. Would prefer o2 but not that bothered. Can't have Orange as their coverage in the area is hopeless - lean out of the window facing south type of thing.
c) Advice
The business is being sold to me by a friend. He's very laid back about the need for a contract, and is happy to hand over existing mobile phone contracts,etc. Me I want to source my own phones because I think I can get a better deal and would like a contract drawn up if only to be sure what is agreed in the deal. There are no friends in business after all. I'm not concerned about him immediately starting up in competition because he is selling because of terminal cancer, the concern is that he is just going to offload it to me and then include/not include bit a pieces. So do I need a solicitor versed in business law and will it cost a lot to draw up the contract?
Thanks all
I would like some help choosing the following:
a) Bank account
Don't necessarily need an overdraft facility, but if I did probably only £2k max. Currently bank on line with Intelligent Finance, and have a second account with HSBC. Would you go with HSBC or is there something better that won't rape me with charges? Have a good history with both. Internet not really an option because of the large amount of cash being paid in regualrly.
b) Mobile phones
Need four handsets all with bluetooth. Would prefer o2 but not that bothered. Can't have Orange as their coverage in the area is hopeless - lean out of the window facing south type of thing.
c) Advice
The business is being sold to me by a friend. He's very laid back about the need for a contract, and is happy to hand over existing mobile phone contracts,etc. Me I want to source my own phones because I think I can get a better deal and would like a contract drawn up if only to be sure what is agreed in the deal. There are no friends in business after all. I'm not concerned about him immediately starting up in competition because he is selling because of terminal cancer, the concern is that he is just going to offload it to me and then include/not include bit a pieces. So do I need a solicitor versed in business law and will it cost a lot to draw up the contract?
Thanks all
Moblie Phones - Have you looked at TalkTalk. If you are mainly calling the drivers from base calls between the landline and mobile are free (and vice versa) and I think the rest of the calls are fairly cheap (you may want to check coverage though). As said above, Vodafone to a corporate plan with cheap/free calls within the company.
Was the previous owner VAT registered?
Will you be VAT registered?
It sounds like both of you should be as the turnover is above the VAT registration threshold. If that is the case, the previous owned should be selling the business to you as a "Going Concern" and NOT charging you VAT on the sale price.
Will you be VAT registered?
It sounds like both of you should be as the turnover is above the VAT registration threshold. If that is the case, the previous owned should be selling the business to you as a "Going Concern" and NOT charging you VAT on the sale price.
Trying to find out what VAT applies to and what it doesn't can be quite complicated. Normal transport costs - trains, planes, buses etc are normally Zero Rated. Taxis are Standard Rated (17.5%) however.
The good news is that you can claim back the VAT on the cost of buying taxis and all the repairs and maintenance on them, fuel costs etc PROVIDED they are your taxis. If the taxis are owned by the individual drivers, then you will not have bought the taxis and cannot claim back the VAT on the purchase cost.
VAT on other business related costs (including purchase of equipment etc) is also reclaimable.
If you opt for one of the Flat Rate Schemes, you give up the right to reclaim any VAT on your costs (including large items of capital equipment) but apply VAT to your Income at a reduced rate rather than the full 17.5%.
The good news is that you can claim back the VAT on the cost of buying taxis and all the repairs and maintenance on them, fuel costs etc PROVIDED they are your taxis. If the taxis are owned by the individual drivers, then you will not have bought the taxis and cannot claim back the VAT on the purchase cost.
VAT on other business related costs (including purchase of equipment etc) is also reclaimable.
If you opt for one of the Flat Rate Schemes, you give up the right to reclaim any VAT on your costs (including large items of capital equipment) but apply VAT to your Income at a reduced rate rather than the full 17.5%.
afew years since i opened a business bank account but they used to offer a new business, free banking for six months or so. uyou may be surprised to learn that businesses have to pay for banking ,on the whole. and what screbbe said,get it all on paper,as you said yourself,no friends in business,have everything itemised
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