Ok, so if I wanted to start a pick n mix shop (for example) on a high street, what would I legally need to do? (hypothetically speaking of course)

Would I have to set up a company and register with companies house? I understand I would have to set up a PAYE system and pay the relevant tax/NI contributions.

Whats the penalty for failing to do these things?

Cheers

Dom

Google 2 secs

Oh and it’s great for running up huge tax debts etc and walking away…..

We may want to encourage entrepreneurs but we also encourage fraudsters too.

No, you do not need to be a Company. You can do it as a Sole Trader, and pay any employees PAYE.
There are pros and cons for both Sole Trader and Company.

A Sole Trader will usually be a pretty small business, less then £100k turnover. The advantage with this is you can do all your own accounting, and cook your books, take cash etc. Morally, and legally wrong, but people do it.
As a Company, you need to have an Accountant, at least to do your year end accounts and audit. He wont sign them off if he thinks you are siphoning off cash.
A Company gives you a fall back, in that you are paid a wage on PAYE, as well as taking any dividends. If it goes bust, you can claim Dole immediately.
If a Sole Trader goes bust, you are in shit creek with no paddle.
The Company also gives you personal protection, in that if you go bust, the Company owes the debts, not you personally, which happens if you are a sole trader.
The Company costs a lot more to run each year. £500-1000 for an accountant immediately, and then you’ll have to pay NI, Tax etc monthly,as well as employees insurance and other things associated.
A sole trader needs no insurance of any sort if on his own, can pay minimum NI of £10/mth, pay his tax 18 months after setting up, do his own accounts etc.

Its horses for courses, low income,low risk then Sole Trader usually, good income,but bigger risk (to both the public and your finances) then a Company would be better.

HTH
Alan.

Thanks for the info Alan, very informative. Just want to say I’m definitely not looking to set up a dodgy business, just interested in the businesses of others……..

In many ways, for small businesses, incorporating can have its benefits reduced – many third parties (esp landlords) will take one look at the company’s lack of financial standing and request a personal guarantee. Hey presto, benefits of incorporation gone to your largest creditor.