There are a hundred different things to think about when setting up in business on your own. Fortunately, there are also a hundred different online resources that will guide you through the steps of creating your business plan, exploring different funding options, creating your brand and so on.
Those are what you might consider the fun aspects. Yes, they are hard work and need to be approached carefully and professionally, but each of them brings your business dream a step closer to reality. In addition, though, there are what we might term the less sexy aspects to starting a business, like regulatory red tape.
Regulatory red tape is seldom fun, but it is something that cannot be ignored or put off. Here, we guide you through the regulatory form filling and box checking – get it all done ahead of time, and then you can get on with driving your business forward.
If your business is going to be turning over more than £85,000 per year, you will need to become VAT registered. If you are not sure whether you will hit the threshold, it makes sense to do it anyway, and then it is something you don’t have to worry about later.
Assuming you are running a registered company, you will be liable for corporation tax. It is calculated at a flat rate of 19 percent on your annual profits, and every business is expected to submit a company tax return each year. Most likely, you will use the services of an accountant to file your tax return. Note, however, that regardless of who is delegated the task within your business, in the eyes of HMRC, the company director is responsible for making sure the tax return is filed and the tax bill is paid.
Financial trading regulations
If your business operates within the financial sector and buys or sells securities, then it must obtain a Legal Entity Identifier or LEI code. This is the result of an EU directive from 2018 designed to improve the transparency of financial transactions. Obtaining an LEI code is not complicated. It’s a simple matter of visiting Leicertificate.org, filling out a form and being issued a code. It takes about two minutes, and costs £45 per year, reducing to £35 per year if you purchase a code with five-year validity.
Will your business be employing staff? If so, there are a few things you need to have in place before launch date.
- Employers liability insurance is a legal requirement.
- Health and safety is something that can’t be left to chance. Draw up a policy, and if necessary, get some expert help.
- Make sure you are clear on how the PAYE system works. As with other tax issues, you might delegate this to an accountant, but the ultimate responsibility lies with the director.
Will your business be handling client data? If so, you need to be GDPR compliant. There has been plenty of media attention on GDPR breaches over recent years, but achieving compliance is actually far easier for a new business than for an established one that has to change its practices. It is all about understanding the rules and building your data systems around them.