Are you starting up in business?
You are setting up in business. You know your market, you know your potential customers. You’ve built your website and marketing strategy. But have you properly considered how to trade? Have you considered how to keep your books?
The two main trading options are limited company and sole trader.
There are significant tax implications but also significant non-tax implications of choosing the right one for you.
Talk to us to find out whether and which type of bookkeeping package suits you. We don’t have an allegiance to one or other. FreeAgent can be very cost effective and many clients of ours love FreeAgent. Another business may be run quite effectively on Excel. Capium may be suitable for another business. We have clients using many different bookkeeping packages from Sage to Quickbooks to TAS to Xero. Cloud based bookkeeping certainly has its advantages. Above all keep it simple if your business transactions are straightforward.
Some businesses will not immediately VAT register until they are more established. Either to keep life simple or because it will impact on their margins. Nonetheless a business can normally claim some input VAT on its purchases PRIOR to VAT registration. In some cases going back many years. So keep hold of the VAT invoices & receipts for expenditure prior to VAT registration and it may be possible to recover some or all of this VAT on your first VAT return. Normally VAT on services in the 6 months prior to VAT registration can be recovered and 4 years prior on tangible items (computers, stock etc.) that are present in the business at the time of VAT registration. This can be quite a significant amount. Expenses deemed to be a cost of sale when the sale did not attract VAT cannot be recovered. Furthermore in some cases it may be advantageous to backdate your VAT registration – for instance to capture that large item of service expenditure that is just over 6 months old.
If you get your books set up correctly to start with it could save money and headaches later on. Come and see us for a free consultation.