advice need

Author
Discussion

tim_s

Original Poster:

299 posts

254 months

Sunday 13th July 2003
quotequote all
i've setup a website which sells services to businesses (i won't go into specifics if you're interested its in my profile) and I've started to get customers much sooner than I expected. do i need to setup a ltd company + bank account straight away or can i do it through my own bank account and then declare my additional income in april 2004? any advice would be much appreciated.

eric mc

122,029 posts

265 months

Sunday 13th July 2003
quotequote all
You do not have to trade through a limited company. Many people run businesses as sole traders (ie self employed). Any business profits generated are returned to the Inland Revenue in your Self Assessment tax return. If you are going to trade as a sole trader, you have a legal obligation to notify the Inland Revenue within three months of the date of commencement of trading.

If you want to go down the limited company route, you should be aware that companies are more expensive and difficult to administer. I would strongly advise a chat with an accountant (preferably a qualified Chartered or Certified accountant)to discuss your options.

tim_s

Original Poster:

299 posts

254 months

Sunday 13th July 2003
quotequote all
thanks for the reply. i think i had better have a chat with an accountant this week.

HiRich

3,337 posts

262 months

Monday 14th July 2003
quotequote all
Tim,
As Eric says, you can operate as a sole trader, or start a Limited Company (either now or in the future).
What I would strongly recommend, though is to get your act in order as quickly as possible. It is important to start your own business accounting system (I use a simple spreadsheet for recording all costs, categorising them, noting receipts, where they appear on bank/credit card statements, and and business/personal split). And of course, you need to know what is claimable.
So, find yourself an accountant, and discuss the form with him asap. Make a list of issues you want to discuss, such as:
- Sole trader or Co
- Use of car(s)
- Transferring computers and other existing things into the company.
- Business bank account and credit cards (these might still be personal accounts, but you use them only for business, and have other accounts for personal stuff)

He will guide you, and instruct you on how to make the most of allowances, and how to make your (and his) life easier. As long as you are very strict about keeping receipts (and a log), and scrutinising your account statements every month, it really doesn't take much time at all to manage.

BIF

149 posts

262 months

Monday 14th July 2003
quotequote all
Another, "just get around to it", dont forget to register for VAT if you think your turnover could exceed £56K in 1st year or you could be liable for the shortfall