UK business startup resources

The government will help your own business get started

It has often been said that Britain is a nation of small shopkeepers, the entrepreneurial spirit is alive and well in the army of self employed business owners in the UK.

Start with your idea for your own business, form a business plan, make it viable, then seek an accountant. The following link will give you access to vital government information. Bear in mind tax breaks, guaranteed small business loans, regional incentives, small business training and don't forget the local chamber of commerce, great for networking.

• Business link 

This business website is the government information library to all things needed to set up your own business, the advice is up to date and relevant, there are some great tools there too. Your tax returns can now be filed online and all relevant links can be found on these pages.

Sole trader or Limited Company formation?

At the early stages of starting your own business, during planning and preparation, you are faced with the choice of opting for operating as a sole trader or forming a limited company. They both have advantages and drawbacks, it is your responsibility to use due diligence when deciding which way to go. You should seek the advice of a professional for your UK business startup, but here are some pointers.

Sole trader, or self employed.

If you want to test the business market and operate as a self employed, one man band, with average earnings, then sole trading is a good start, not forgetting that you can always convert to a limited company in the future. There is less paperwork involved, your annual returns do not need to be filed at companies house and made public.

You must first register with the inland revenue, guidance is seen here inland revenue. Make sure that you register before you trade because the revenue will impose financial penalties for late filing. If your turnover takes you above the threshold then you must also register for VAT.

A sole trader, or sole proprietor means that your business is just an extension of yourself, you can have a business name, although this could lead to potential problems, so your own name may be more suitable.

All your business taxes are payable personally, by you. All the after tax profits are yours and all the losses. If your business ever appeared in the courts then you are personally liable for any damages, there is no distinction between the business and you. You remain liable for any losses.

You can file your own taxes, with software like sage, it is very easy to conduct your own accounting, although many people use the professional services of an accountant and they can be found online, but a personal recommendation is worth its weight in gold.

Your business is always considered second class in the business world, for some strange reason, banks and companies prefer to trade with Ltd companies, even though there is usually less owner / risk ratio.

There are some very successful sole traders operating in Britain, these people are happy to continue without double taxation, shareholders, audited accounting and companies house, which leads us to the next subject;

UK business startup as a Limited company?

 This is the vehicle for the serious business person in the UK.

When you form a Limited company, or Ltd, a new legal identity is formed, almost like a birth. Your company has stand alone status, it is a separate legal entity and is owned by its shareholders. The limited part of the name means that the debts of the company are limited to the company and not to the shareholders. The main structure of taxes levied on the company are by corporation tax.

Shareholders can be private individuals, or other companies, each company must have at least one director and a company secretary. Even as a director, you are an employee of the company, and any salary you pay yourself is subject to paye. If a profit is declared then you can pay dividends to the shareholders and these are subject to a different class of corporation tax.

Things are very formal with companies and you would be expected to have board meetings.

If you want to float the company on the stock market, then you must register for a public limited company, or PLC. A PLC must have two directors and £50,000 of issued shares to start trading.

Accounts must be audited by an accountant and all accounts must be filed with Companies House these are then published and anyone that pays the small fee can gain a copy of your companies full accounts.

 The advantages can be taxation based they can also based on the ability to raise capital by issuing shares, one of the greatest advantages is the ability to sell your company, or sell a part of it, by shares. banks and investment angels look very favourably toward Ltd companies, because of their accounting structure and the commitment of the directors.

Limited companies can now be incorporated online they offer a range of quick and easy options.

More UK business startup resources can be found on Google.