by Steve Livingston on July 21, 2010
If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Better to be a disciplined entrepreneur from day one. Here is a checklist of 11 tips how:
- Get your company incorporation certificate, Memorandum & Articles of Association downloaded and on file. Plus a shareholders agreement if you have one. This will form the basis of your statutory books which you must maintain for any changes in shareholders, directors etc going forward.
- Complete and file Form CT41G with HM Revenue & Customs to register your company for corporation tax purposes and to get your employer payroll package ordered and registered with HMRC (or refer to point 11).
- Get the relevant documents (in point 1) plus your passport and a recent utility bill together ready to set up a business bank account (get used to pulling together these personal docs for routine money laundering checks for pretty much all financial services).
- Set up an A4 lever-arched file ready to collate all of your paper invoices received for amounts payable. Put a divider in the file to separate paid invoices (behind the divider) from the unpaid invoices (in front of the divider). Start numbering the invoices received sequentially to (ideally) match your online accounting software (see point 6).
- Decide whether it is right for your company to register for VAT (or refer to point 11).
- Choose a decent accounting package so that you can get all of your financial affairs including invoicing etc set up ready. I like Xero.
- Check your founder(s) shareholding allocation now e.g. if there are any shares to be allocated to key (present or known future) management / employees do it now or asap before the value in the business (and therefore shares) increases. If you delay you could store up some nasty capital gains tax, income tax and national insurance liabilities for the future…
- Get all your ducks in a row with regard to all industry certification and insurance requirements for your particular sector. Would be embarrassing and unprofessional to get this wrong.
- Think now about protecting your crown jewels. Is there any intellectual property, trademarks or patents that need filing, protecting or transferring before you launch your BIG idea or go head-to-head with the competition?
- Go get yourself a natty logo, stationery and website. Remember to include your company name, address, registered company number and VAT (if applicable) on your documentation. Get business cards too. Register your Twitter account. Start a blog. Tell the world.
- Get yourself a supportive accountant and tax adviser who understands your niche
Photo credit
by Steve Livingston on June 22, 2010
There was mixed news for fast growth technology and digital businesses in today’s Emergency Budget. Headlines were as follows:
Corporation tax rates will be cut from 21% to 20% for small companies ie those with taxable profits up to £300,000, with effect from 1 April 2011. Large companies will benefit from tax rate cuts from 28% to 27% in 2011 and a 1% decrease each year to 24% in 2015. A hugely competitive rate.
Capital gains tax for entrepreneurs was actually enhanced with the 10% effective CGT rate preserved under Entrepreneurs’ Relief and the lifetime allowance increased from £2m to £5m. It was disappointing that more was not done to extend the benefits of Entrepreneurs Relief to employees holding share options, many of whom will be taking a career risk sticking with fledgling startups (rather than taking ‘safer’ jobs) so they deserve to be rewarded like the founder shareholders.
New start ups in the north west will benefit from a national insurance contributions holiday for the first year of trading for the first ten employees. The scheme will run for 3 years and could save businesses up to £50,000. It will kick off in September this year but businesses started in the interim may qualify.
Capital allowances will be reduced to fund the above corporation tax rate with the Annual Investment Allowance for investment in say computer equipment and office furniture reduced from £100,000 to £25,000 from April 2012. There are further reductions for investment in fixed assets so businesses should seek to accelerate planned capital spend before April 2012 when the changes take effect.
VAT increases from 17.5% to 20% from 4 January 2011 should have minimal effect on most B2B businesses as the increased VAT rates should wash through in most cases. B2C businesses will be hit next year although a 20% VAT rate remains competitive globally.
R&D tax credits will be preserved which is great news and a review will take place in line with the Dyson review which may enhance the relief. Disappointingly the planned video gaming relief will be withdrawn - why this is the case is baffling to me as the video games industry is one in which we already have a competitive advantage and the likes of Canada already have such tax breaks.
A Regional Growth fund along with pressure on banks to lend to SMEs should assist in ensuring that businesses have much needed access to funding.
Overall, the Emergency Budget was positive for businesses with a clear plan for growth and stability over the next 5 years.
What’s your view?
