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Wednesday September 9, 2009 Dear ReaderWhich structure is best for my business?
When setting up your new business, the decision you take about the structure will have a considerable bearing on your current, past and future finance and tax affairs. I use the word “past” deliberately as any losses in the first year(s) of trading might be able to be used against other types of income to get back some of your initial investment. There are three basic structures to consider in setting up the business, sole trader, partnership and limited company. A partnership is effectively 2 or more sole traders working together, each partner is taxed individually on their share of the profits or losses. Each structure has its benefits and disadvantages in terms of costs to operate, protection for the owner, tax liability and administration effort. The good news is a business’ structure can be changed through time to gain the most tax and protection advantages. However, choosing the wrong initial structure can cost the business owner unnecessarily and in the event of making losses, could prevent valuable tax relief from being obtained to prolong the life of the business’ limited cash. If you'd like to learn more about each of these structures and their various advantages, please drop me an email and I'll send you a complimentary copy of tip one from our new e-book "Ten Top Tips To Help Manage Your Business Finances". End of Paper VAT ReturnsHM Revenue and Customs is moving towards the end of paper filing of VAT returns from April 2010. If your sales are in excess of £100,000 per annum or you apply for VAT registration after that date, you will be required to file your returns electronically. One advantage is that you are given an additional 11 days before the VAT payment is taken from your account. Businesses need to register in advance to use the service - this therefore needs to be planned as the process can take a few weeks to complete. If you'd like help switching, please give me a call on 0845 644 3579. |
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