Business start-ups in the UK can rely on the expertise and experience of Hammersmith Chartered Accountants for a formidable head start. While starting a business is one of those moments of uncertainty you must confront in the life of commercial ventures, it need not worry you too much; thanks to Hammersmith Chartered Accountants. Here are some of the ideas you will find handy even as you set sail into the sea of business in the United Kingdom.
The UK has a raft of sound laws that govern both established businesses and start-up ventures. Tax laws are some of the most elaborate laws in any jurisdiction. Hammersmith Chartered Accountants makes you feel at home whenever you begin to grapple with the complexities of the tax law and your new business. Indeed, taxation affects your business overheads. While many businesses prefer to pass the costs to the consumer, the bottom line is, often, significantly affected too. The government also keeps reviewing its laws about wages and salaries. The national minimum wage policy, for instance, has been extended to apply to people under the age of 18 years. Furthermore, businesses have, in the recent past been required to build premises that are friendly to the physically handicapped. For example, they are required to build ramps to make it easy to access offices for the special groups and even to include aspects that cater to such groups in the interior designs of their premises..
The UK government has also enacted laws that protect the consumer from being short-changed. There are laws that make it compulsory for producers of products and providers of services to make sure that what they offer is up to the acceptable standards. The laws also help to prevent the proliferation of unscrupulous businesses that have no regard for the rights of the consumer.
In addition to consumer laws, the government has also enacted laws to ensure that businesses trade fairly. You have equal rights as a start-up to conduct businesses without being subjected to unfair competition. Businesses are subjected to the same legal requirements for compliance.
How Government Policy Affects Start-ups
The government creates rules to regulate businesses for purposes of fair play and maintaining sanity. Well, if you are a start-up business, that bit may be well known to you. Fortunately, Hammersmith Chartered Accountants will be by your side. What you may not know is that even such laws, created by governments, keep changing. Therefore, there is always a need to keep abreast with the current policies and laws to avoid being caught on the wrong foot. Some of the government policies are easily adoptable while others may require reconfiguration of the business in both structure and nature. The role played by the state in the economy is worth examining too. The creation of industries that were run by the state caused a lot of interference in the independent dynamics of business in the UK and beyond. Fortunately, most of the industries have since been privatized and, thus, allowed free competition to run the economic show.
The Tax-Free Personal Allowance
If you operate in the UK, there is a £ 12, 500 Standard Tax-Free Allowance for the year 2019 and 2020 business year. You are not required to pay anything more until records show that your earnings have increased. If the latter happens, a 20% tax is chargeable on earnings ranging from £12,000 to £50 000. Higher taxable earnings will attract taxes of up to 40%.
Apart from the usual direct taxes on the earnings of the business, businesses in the UK also attract environmental taxes which incorporate landfill.
While the administration of VAT targets the business, businesses pass the cost of the tax down to the consumer. The VAT is a reality you must include in your computations for your business start-up.
Interest Rate is yet another area that any business start-up must examine with care. The Monetary Policy Committee is a unit formed by the government in the UK to control the interest rates charged by the financial institutions. The committee meets once every month to review the existing state of affairs and recommend changes
in the prevailing interest rates in lending institutions across the landscape. An increase in interest rates automatically increases the cost of borrowing. People tend to avoid borrowing when the interest rates are too high. Consumers also cut down their expenditure. These developments affect business overheads negatively.
The Spending Policy
As a start-up outfit, you are well-advised to examine the latest government spending on various sectors. Booksellers and suppliers of school equipment are set to gain
more if the government decides to spend more on schools.
You also need to take note of any subsidies that the government gives to specified sectors. Such knowledge may guide you effectively on how to stay ahead of the pack. You should be able take advantage of such subsidies if your business is eligible. Indeed, the government offers subsidies such as to activities that carry the
capacity to take up for the long term, those who are unemployed.
Startup Business Financing
The UK offers a wide range of options for financing business. There is a spectrum of financing options but you must always seek expert advice on which option suits
your business and circumstances the most. In summary, you need to draw a budget for your start-up; it guided by your business plan. Compute the amount your
start-up needs. Remember that you may spend more than your forecast. So, give your estimates an allowance to cater for the unexpected. The latter move is for
contingency purposes. Make sure that the bank you seek financing from has full knowledge of the amount you need. To stay on the safer lane, determine the investment financing that you will opt for. Since you are not assured of quick returns to offset your loan obligations, you need financing that gives you a reasonable
allowance to put your house in order. In a nutshell, check out
How to Finance a Business Start-up at a Glance
- Prepare a budget
- Figure out how long you will need funding
- Identify the risks involved
- Figure out how much you can raise from friends and family
- Figure out if there is a need to seek outside funding such as from a bank
- Craft a convincing business plan that shows how you will work and the sources of funding
- Approach your potential financiers, including banks and others included in your business plan.
- Make sure you have all the funding before you launch.
Even with Brexit still fresh in people’s minds, you should remember that the EU still affects businesses. There are policies that are still in force, and they
significantly affect the way business is conducted in the UK.
How to Set Up a Start-up Company in the UK
Structure, Name, and Address
To register a company in the UK, you need to identify a name for your company. The process involves supplying several names just so that in case the registrar of
companies finds it necessary to adjust your company name, you will save time by allowing them to register the one that complies with the registration
regulations. Once you have, at least, three names you can opt for, you are required to send your application to the Company’s House. Moreover, you need to
have a clear physical and postal address indicated in your documents. The UK Company’s Act also requires that a company has a Director. It should also have,
at least, one shareholder. You should also supply the Registrar with the Articles of Association. The documents should come with a memorandum of
understanding on how the company will be run. The memorandum is, of course, a product of deliberations of the company owners. Lastly, you are required to set
up your company for corporation tax. If this sounds rocket science to you, Hammersmith Chartered Accountants will do this for you free of charge.
Time and Charges
In the UK, once you have your documentation for your business start-up in place, it may take as little as only 24 hours to have your business registered. It will ordinarily take much longer if you opt for paper documentation. It will cost you £12 to register a company. The cost of registration for paper-based documentation is £ 40. It will also take up to 10 days to process the application for the latter application type. Then, your business start-up will be good to go. If you are still not sure of what to do, call Hammersmith Chartered Accountants and will help you.