Top 5 Accountancy Pointers for New Start-Ups

Our expert client AMS Accountancy Ltd discuss their top 5 accountancy pointers to help new start ups.

Business Structure
The very first decision you should make is what business structure you should use; i.e. Sole Trader, Partnership, Ltd Company etc. The most suitable structure will depend on your circumstances and the nature of the business you are starting. For instance, if you are only trading occasionally, or say, letting a property it would probably be as a Sole Trader, if you are dealing with lots of transactions with a number of clients, then you could look into setting up a Limited Company. There are so many different scenarios that it is probably best to get advice.

Understand your responsibilities
For example, if you are a sole trader (self-employed) you must register as Self-Employed with HMRC. The self-employed accounts will provide information to be included in your self-assessment income tax return. Partnerships are very similar to Sole Traders in this respect. Alternatively, if you form a Limited Company, it’s a separate legal entity and the responsibilities of a company director are more complex and you will need to learn about Directors and Shareholders.

Tax treatment and rates for your business
To be in control of your business, it’s useful to know when and if you should register for VAT, this can also depend on the type of clients you have. Set up a payroll, if it’s applicable.  Have a rough idea of (or ask your accountant to give you) your tax liability going forward.

Understanding tax deductible expenses
Business expenses can be claimed as part of your business accounts. They will reduce the taxes you/your business must pay. You will probably require some help from your accountant to make the most tax efficient decisions on expenses.

Bookkeeping method and records
Setting up an efficient record keeping system for your business is crucial. It is essential for keeping track of your trading. You will need to understand which records must be kept, which ones should be recorded and the most efficient way to do this for your specific type of business. As with all aspects of setting up a new business, you should get advice from an accountant.