Starting a business

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  • Starting a business
  • Premier Icon NewRetroTom
    Subscriber

    The HMRC website has some fairly helpful information. http://www.hmrc.gov.uk/startingup/index.htm

    You probably will need to engage the services of both accountants and solicitors in the long run to make sure you have structured your business in a sensible way and that you have watertight contracts.

    rossatease
    Member

    engineeringcowboy – Member
    … make sure I’m doing everything right for the tax man.

    There, right there recipe for failure, don’t start a business with them in mind they’ll nail you soon enough, the fundamental thing with a business is income stream and getting paid, then not paying half of it to everyone else.
    Tax man, your job is to give them nothing, they’ll take enough by force as it is, don’t make it easy for them.

    I have a solicitor and accountant lined up. My friends dad runs his own business, but I just wanted to read up before I started out so i know roughly what to expect.

    i will take a look at the mdc website as well

    chipsngravy
    Member

    From a tax perspective, the HMRC link provided above is good.

    From experience a good accountant and solicitor have proven excellent value for money.

    In your case the solicitor will be essential for making sure your contracts are robust.

    The web is awash with business start up info

    http://www.theguardian.com/small-business-network/2013/mar/21/starting-a-new-business

    My personal tip after 18 years… Cash is king. It’s all about cash flow.

    Good luck.

    I was wondering if anyone knew of some books about setting up there own business, just want to read up on it so I don’t get fobbed off by accountants or solicitors and make sure I’m doing everything right for the tax man.

    Will be starting of acting as an agency for engineers then moving on to plant and labour, then perhaps taking on my own contracts.

    Premier Icon kcal
    Subscriber

    hopefully your business name isn’t going to be be your username … 🙂

    chewkw
    Member

    kcal – Member

    hopefully your business name isn’t going to be be your username …

    😆 Look! Look! Cowboy!

    craigxxl
    Member

    As an accountant and understanding your line of business you’ll need to be spot on with payroll and HR. Assuming your talking about employment rather recruitment agency then to make the business profitable you will need to be placing lots of people with clients. The number of people on your books means that you’ll be making monthly PAYE payments within 14 days of the tax month end. Your clients will no doubt be on at least 30 days credit and since your in such a competitive market they will most likely expect and take 60 days to pay. This is going to put serious strain on your cash flow and is the main reason for agencies going into insolvency. It used to be a case of agencies paying what they could afford to HMRC by fiddling the payments. Under Real Time Information this is no longer the case as HMRC know how much tax is due down to the penny for each employee. If you don’t pay the due amount on time they are quick to chase.
    The required turnover to be profitable will mean you will soon be VAT registered. I would suggest using cash accounting whereby VAT becomes due when suppliers are paid and clients pay you instead of paying on invoice dates. This will help your cash flow.
    Going with the attitude that accountants and solicitors are going to rip you off, most will out price themselves so you become someone else’s problem. The ones that will take you most likely won’t be as good and you’ll realise this when you need their experience the most and they can’t deliver.
    In regards to payroll software look at products that allow you to import time sheets direct from the client such as a through an online portal. The less manual transferring of figures the better to avoid errors and delays in client payments. Also look at the export capabilities of the payroll software into your accounts package for billing to clients to ensure speed and accuracy.
    Good luck with your venture and get skilled people in where you need them such as payroll rather than trying to do it all yourself.

    makkag
    Member

    If you are going to be working as an agency – have you considered how your going to pay the contractors Weekly/Monthly etc as its rare that clients pay on their credit terms leading to cashflow issues and potential restrictions on growth.

    I am an ex recruiter and now Director of a small Invoice finance company. We often fund new start recruitment agency’s through factoring of invoices.

    If your going to be offering contractors/temps id be happy to share my knowledge with you if required.

    Premier Icon chakaping
    Subscriber

    Check this out…
    https://www.gov.uk/starting-up-a-business

    Unfortunately Business Link appears to have been replaced with some vague Enterprise Network, which looks like it might want to charge for advice to newbies.

    I suppose that’s only to be expected from having the party of small business in power though.

    🙄

    Premier Icon binners
    Subscriber

    Best advice anyone ever gave me on the subject:

    When you’re really, really busy, thats when you need to be out there looking for more work

    Oh… and HMRC will be a nightmare. They always are. The most incompetent organisation in the country. Completely dysfunctional. Expect to spend half your life on hold, in their labyrinthine Kafka-esque world, waiting to speak to some hairless ape who’s completely ****ed up your VAT. Again!

    A good solicitor and accountant are worth their weight in gold. Its helpful if your solicitor is a malicious and sadistic sociopath who owns a set of thumb-screws

    My personal tip after 18 years… Cash is king. It’s all about cash flow.

    Words of wisdom indeed. When my business folded, we were owed massive amounts. Not much use to you as figures on a balance sheet, when you’ve bills to pay, and its all still sat in someone else’s bank account

    Lots and lots of usefully information.

    I’m currently working for an agency for a main contractor through my limited company.

    My agency have been messing me about and I’ve decided, with the help of the commercial manager to skip the agenc, make a couple of pound more myself and save the company a couple of pounds, and sub contract directly for the main contractor which would become my first client. I will also take the other 4 agency staff on to my books.

    I have agreed terms, though not in writing of billing them every 30 days and then a 14day payment, so even if they don’t pay me for 30 days I’m still only waiting 8 weeks.

    I have enough money to cover the first 10 weeks for all 4 employees I plan on taking through my books, so whilst tight cash flow shouldn’t become an issue.

    I’m doing it this way as a soft start to make sure I have all the tax and paperwork issues sorted. I’ve on this project for another 8 months, so I appreciate I’m going to have to start looking for work for the other guys straight away. To begin with I’m going to continue working myself, to aid with cash flow whilst I get a few more people on the books.

    Going with the attitude that accountants and solicitors are going to rip you off

    Whilst it may have come across like that, I didn’t mean them ripping me off. All I mean is that I’ve been working as a ltd company for couple of year, and whilst my accountant seemed relatively good he didn’t really realise bits about construction such as CIS so I’ve been blindly following my accountant and not really ticking all the boxes, and whilst I’ve managed to avoid any issues with the taxman, when I start employing other people it’s not just my life it might mess up.

    Hence why I want to know what I need to ask for before going to accountants and solicitors.

    makkag
    Member

    One thing to be mindful of on CIS work aside from the current HMRC Legislation effecting CIS Umbrella solutions is CIS gross status for your business.

    If its CIS applicable Until you get it the end customer will deduct 20% of the total invoice value from you upfront which could cause issues with cashflow paying staff, dependent on what payment vehicle you use to pay contractors.

    Its an issues for factors as we only advance 90% on the invoice value so would be 90% on the 80% so to speak. and generally margins may not be enough to cover it.

    However if your managing payroll yourself and the guys are limited or Self employed you deduct the 20% from their pay negating the issues.

    I think its 30k of CIS applicable Turnover per director before you can apply for Gross status . but don’t quote me look on HMRC as its been a few months since i saw one of these businesses.

    feel free to pick my brains if you need too

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