Before you start a business, it is important to choose a suitable business structure. There are mainly three types of business in the UK, sole trader, business partnership and limited company.
To establish a business organization, normally there are three procedures to follow which include registration, setting up a bank account, tax registration.
As a sole trader you will need to register for self-employed tax, apply for National Insurance number and register for self-assessment with HMRC.
As limited company, you must register the entity with Companies House. To set up a limited company, you need to have a name and address for the company, articles of association (agreed rules about running the company) and appoint at least one director.
Trading as business partnership, you need to register for self-assessment with HMRC and choose a business name under certain statutory requirements.
The second procedure of business establishment is setting up a bank account. To set up a bank account for your business in the UK you can either:
It may be cheaper to open a UK account or to set up a UK sterling account with your own bank, to avoid transaction and currency exchange fees. You’ll need a UK address before opening a UK bank account. It is important to compare the policies between different banks.
New company must register for corporation tax. Self-employed should apply for National Insurance number and pay National Insurance contributions depends on earnings. Business with expected annual turnover of more than £83,000 must register for VAT with HM Revenue and Customs (HMRC).
Besides the process mentioned above, there are some other points need to pay attention to.
Certain organization need to apply for a licence depending on your business activities, such as food operation, alcohol retailing and carving service, etc.
It is required by law for business to have three types of insurance as employers’ liability insurance, public liability insurance and building insurance for properties. There are also other business insurances can be used to reduce business risk.
The owner of the business should be aware of the National Minimum Wage and be familiar with policies about overseas employees.
Employer need to register HRMC PAYE Online service, then deduct tax from the employees’ wages and pay those through the system.
It is very important to have access to the government policies which may affect your business. Utilise government supports and predict the policy influence on economy.
The above information and calculations are for illustrative purposes only. No liability is accepted by O’Brien S & Co Ltd for any actions or losses from investment in reliance on the information and calculations. Consult a qualified professional financial advisor before making any financial decisions. O’Brien S & Co Ltd holds the copyrights in all materials on the website. All rights reserved.