Help with TAX and VAT please

  iqs 13:17 30 Oct 2009
Locked

Hi,

Hopefully in then next few months,I will be starting my own business.

The company who will assist ,if they believe the business is viable,will offer all the advice and support needed.

Prior to this meeting,I am trying to gather as much info as possible about starting and running a small business.

One are I lack sufficient knowledge is with paying VAT & TAX.

I know you have to pay tax on everything your earn :-( ,but can you pay it monthly or yearly.How simple is it.

Also with VAT,can this be claimed back monthly or yearly,what can you claim back the VAT on.

In regards to running costs,buying items for your business,can you claim the VAT/TAX or all of the expense.

Sorry for asking so many questions,It would just be nice to have a basic understanding prior to the first meeting.

Cheers

  I am Spartacus 13:18 30 Oct 2009
  Quickbeam 13:43 30 Oct 2009

Talk to an accountant, they understand it inside out, and in my experience they save you more than their fees cost you.

  ajm 14:12 30 Oct 2009

I highly recommend you speak to an accountant before you do anything, especially where it concerns VAT.

I have been self-employed for a while now and I was told by other IT consultants that I would look "good" if I was VAT registered and could claim back VAT on many purchased, fuel, etc.

Speaking to the accountant who is based in Edgware, but has clients from all around the country and abroad, he said that in my case it is not worth being VAT registered due my turnover. He also offered invaluable advise of what to do in the event that my turnover exceeed the VAT threshold - that advise alone was invaluable.

There are many ways to structure your business, and doing it correctly from the beginnning will be much beneficial than later as complications can arise.

I shall be more than happy to recommend this accountant should you wish to contact him. However he is away until the 10th November. I hope my saying this doesnt go against the rules of this forum.

  ajm 14:13 30 Oct 2009

Perhaps this belongs in the "Business" section of the forums.

  wee eddie 15:31 30 Oct 2009

"The company who will assist, if they believe the business is viable, will offer all the advice and support needed."

This sounds like a Franchise Operation.

Get an Accountant before you go any further.

Remember that any Franchiser will be aiming to make a Profit, from their relationship with you, from the moment you sign along the dotted line.

Some Franchisees thrive, others fail. Sometimes because the Concept does not work as expected, other times because the Franchiser controls your supplies and charges well over the Market Rate (see PubCos), it is also possible that the Franchisee might be unwilling, or unable, to put in the Hours Required.

Most Small Business Start-ups will need, whatever anyone says to the contrary, you to work about 80 hours a week (no Holidays) for the first 2 years. That can be cut in later years, but remember that the cost of Staff, that are needed to Cover your absence, comes out of your own pocket.

  961 16:45 30 Oct 2009

Find a GOOD accountant, if possible by recommendation from those you know and trust

He'll probably arrange a first appointment for very little but even if it costs it is so important to decide, before you start, what date should be selected for the business to start up, and how long the first set of accounts should cover. This can make one enormous difference to how much you pay in tax in the early years. Hundreds and maybe thousands of pounds and also when you have to cough up the first payment

He'll also advise on VAT, whether to register, and, if you do, which system would be best

And if you find you don't like the first accountant you see (or he doesn't like you) don't be afraid to pay him for his time and go elsewhere

  GANDALF <|:-)> 17:04 30 Oct 2009

Speak to an accountant and do not take too much advice from people you have never met.

G

  iqs 17:32 30 Oct 2009

Hello all a thank you for all your advice and suggestions.

I have been educating myself via the link supplied I am Spartacus.Have downloaded a few pdf's,will spend more time going through them tomorrow.

From what I have read so far,you only need a VAT code if you are earning over £68.000,that would be nice.Under this total its your decision.Its a little clearer now.

The company who will be assisting,were recommended to me via my local job centre.Since finishing college 5 months ago,I have unable to find an IT job.So I thought,why not give going self employed a go.Its worth a try.

Its just a big step,made more difficult due to the lack of knowledge.

ajm if you could pm the details,I can discuss this with the company on Tuesday.

Thanks for the advice G

Once again many thanks to your all.

  Mike D 18:10 30 Oct 2009

Get some advice on the franchise, if it is a franchise. Your local Business Link should be able to help, as should your bank. Some franchises are not very "entrepreneur friendly" and take one hell of a fee before you get a look-in. Most are OK, but sometimes there are very restrictive clauses in the franchise agreement, such as where you purchase any consumables from (I have come across one that dictated where the franchisee obtained any general stationery)and who does your accounts - you may have to use an "approved" accountant. In a former life as a Business Advisor for our local Chamber of Commerce I saw many suiccessful new business start-ups and franchises, but I also came across some horror stories. Please go and seek professional help, with the best wil in the world the franchisor is looking after hios business first, not yours.
Mike

  iqs 18:16 30 Oct 2009

Thank you for words of wisdom Mike D,will be asking the right questions and making notes.Will let you all know how it go's Tuesday.

Thanks ajm

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