Services for start-up businesses
Put simply, we love working with start-up businesses! The excitement around a new business is infectious, and we love hearing the ideas, the inspiration, and learning about the people behind it.
Our free discovery meeting allows us to learn this, but most importantly for you to ask us any questions. Starting a business does mean a lot of legislation and compliance, but our role as your accountant and business advisor is to explain, advise and reduce the stress. From our experience of advising start-up businesses we have developed a checklist (not just accounting and tax points) – but no two situations or businesses are exactly the same and that is why we have regular communication with you.
We’ll get you on the right path from the start. Everything from the business structure to the bookkeeping software all need to be considered, and we take the time to explain and advise so that you are comfortable with the direction. Veritons itself was established in 2022, which means our own experience of starting a business is still very fresh in our minds. Below are a few of the questions any start-up business will face, together with detail on exactly what it means but also head on over to our blog page for articles covering specific aspects, or for more detailed guidance sign up to our factsheets.
If you’re starting a business why not book a free discovery meeting with us at Veritons to see how we can help. Click the button below to contact us.
What business structure should I use for my start-up business?
There are a lot of considerations to take into account when deciding this, but let’s start with the options. If you are going into business alone then your choices are either sole trader status or a Limited company. As a sole trader you are the business, meaning any contracts are binding on you, and business liabilities are yours personally. If your income is over £1,000 a year then you will need to register with HMRC for self-assessment which means completing a tax return reflecting your trading results for the year. If you go the Limited company route then it is a legal entity itself meaning it is bound by contracts the director(s) enter the company into. The shareholders (who may also be directors) will in most circumstances have Limited liability should the worst happen.
If you are going into business with one or more other people then additional options to the Limited company are an unincorporated partnership or a Limited Liability Partnership (LLP). In an unincorporated partnership the partners have unlimited liability and can really be viewed as a collective of sole traders. In an LLP the members will in most circumstances have liability limited to the amount they inject as capital.
The limited liability afforded by either a Limited company or a Limited Liability Partnership (LLP) come at the expense of more rigorous public filing requirements. If going into business with others a major consideration is the legal status and we would always advise consulting with a solicitor at the outset to draft a partnership or shareholder agreement.
What accounts and tax returns are required for each of these business types?
As a sole trader with income over £1,000 you will be required to file a personal tax return with HMRC reflecting your business results.
If you are an unincorporated Partnership or an LLP each Partner/Member will need to file a personal tax return, and although the Partnership/LLP itself is not subject to tax it must file a Partnership return that tells HMRC how the profits have been split between the Partners. An LLP will have the added requirements of having to file annual accounts with Companies House within nine months of its’ year-end, and an annual confirmation statement that confirms some legal details of the entity.
A Limited company is subject to corporation tax and so it must file a tax return itself within 12 months of its’ year-end (but in a quirk of the legislation it must have paid any corporation tax due within 9 months’ of its’ year-end). This return needs to be accompanied by a special digital copy of the company’s accounts. Like an LLP, the Limited company will also need to file accounts with Companies House within nine months of the year-end (or 21 months after incorporation – whichever is earlier), but depending on the size of the organisation these accounts can be a simplified version so that you are not disclosing more potentially sensitive information you would rather your competitors didn’t see. It will also need to file an annual confirmation statement with Companies House confirming legal details. It is likely that the shareholders will also need to file personal tax returns with HMRC to reflect dividends they receive from the Limited company.
At Veritons we can take care of incorporating your Limited company or LLP and the relevant registrations with HMRC, giving you time back to deal with the hundreds of other decisions (we’re always more than happy to share our experience on those too).
What about VAT registration? When must start-up businesses register for VAT?
The requirement to register for VAT will not be affected by which business structure you choose for your start-up business. Whatever guise you are trading under, once turnover exceeds the VAT Registration Limit (currently £85,000) in any rolling 12 month period then you will have to register for VAT unless the activity you are doing is exempt – only a few are.
The structure you choose will have an impact on who is actually registered for VAT, whether it be the individual, the partners, or in the case of an LLP or Limited company the legal entity itself.
What is the role of an accountancy firm for start-up businesses?
Your accountant should be providing clarity at every stage. There will be a huge amount of considerations and decisions to make when starting a business, and your accountant should be simplifying and de-stressing the accounting and tax ones. At Veritons we will not just drop a load of information on you and wait for you to make a decision. Our discovery meetings and follow ups are as long as they need to be to make sure you are comfortable as a start-up business with how things work and what the decisions mean. It is important to try and have the optimal structure in place from the start and at Veritons our goal is to ensure you are happy with everything ahead of starting your business journey.