44 | JUNE 2019
Business
Read online at www.proinstaller.co.uk
BACK TO BUSINESS BASICS
Starting a business is not terribly hard but neither is it really straight-forward. Benjamin Dyer
of Powered Now looks at the main issues you need to think about when you go solo…
In this short article I try to
cover the things you must think
about to start a successful busi-
ness. The danger is that you won’t
be around for long unless you
have all of them ticked.
The legal things
needed
The good news is that as a new
business it is unlikely you will
need to register for and charge
VAT. Nor is it likely you will want
or need to ‘incorporate’ as a limit-
ed liability company. This makes
things easier.
The things you do need to think
about are registering as self-em-
ployed, keeping accurate records
and filling out a tax return once
a year. Then there’s any health
and safety legislation applying to
the particular trade you will be
working in.
You must register as self-em-
ployed by the 5th of October
following the end of the tax year
(5th April) in which you started
your business. Your first tax return
and tax payment will be due by
the following 31st January and
you must submit this online. For
example, if you start your business
on 7th January 2019, you must
register as self employed by 5th
October 2019. Then you submit
your tax return electronically and
pay your tax by 31st January 2020.
Searching the HMRC web site will
turn up more detailed instruc-
tions.
You will pay income tax on the
difference between your sales and
costs, but more than the first £10k
tax is free. You may also need to
repay part of your student loan as
well as Class 2 and Class 4 Nation-
al Insurance. In later years, HMRC
may require an advance payment
for the following year’s tax bill.
You must always put money aside
for your tax bill all through the
year.
If you hire anybody as an
employee, there are quite a few
additional rules to follow.
You need to record all of your
sales on invoices. My suggestion
is that you base the layout of your
invoices on ones that you receive
from other businesses, ignoring
VAT.
You should keep a record of all
of the costs that are associated
with your business and that in-
cludes your receipts and invoices
for all charges. This is not just for
the obvious things like materials,
tools, van costs and petrol for trav-
elling to jobs. You can also usually
claim for a share of the costs of
running your house. That is if you
use it sometimes for doing paper-
work, storing materials etc.
Although there will be some
fees, it’s worth getting an account-
ant who will advise you exactly
what you can claim for. This will
help you to legally minimise your
tax.