The New Business Checklist – Setting up a New Business

Once you’ve made the decision to start your new business, the next decision is what type of business you’re going to be. Whether you opt to be a sole trader, set up a partnership or incorporate your business as a limited company, there are steps you’ll need to take to ensure everything is properly set up from the start.

Setting up as a sole trader

1. Step one is to register yourself as self-employed for tax and National Insurance purposes with HMRC (Her Majesty’s Revenue and Customs). They can send you a form to do this or you can complete the information online.
2. If your business is likely to be liable for VAT registration (the current threshold is £82,000), register with HMRC and file any information. You can also register voluntarily if you want to reclaim VAT on business expenses.
3. If you will be employing anyone else, register with HMRC for PAYE.
4. Set up a bank account. There’s no obligation to have a separate account for your business income and expenditure but it will make things easier. It doesn’t have to be a specialist business account.
5. Check out an accountant – you might feel you can undertake your tax returns yourself but it is always worth checking you are doing everything correctly. Most accountants offer an free initial meeting. To book a meeting with Emma Stevens Accountancy check out this page.
6. Contact your local council to find out which permits, certification or inspections you need for your type of business.
7. If you take on premises you will have to register for business rates. There’s more information about those on the Business Rates page at GOV.UK.
8. Make sure that your insurance covers you – you’ll need employers’ liability insurance if you employ anyone else, and if you intend to offer any form of professional advice you will also need to take out professional indemnity insurance. You could also need public liability or product liability, depending on your type of business.
9. Don’t forget your domestic insurance if you will be working from home – if you have to claim and you haven’t told your insurer, you may find that your policy is invalid.

Setting up a partnership

1. Every partner should register with HMRC as self-employed.
2. Draw up a ‘Deed of Partnership’ – this specifies the amount of capital every partner will put in, how any profits or losses will be split between partners and what each person’s role is within the partnership.
3. Set up a bank account for the partnership. You’ll need a separate account to make accounting simpler.
4. Decide if you are liable for VAT (as for sole traders) and register with HMRC if necessary.
5. Register for PAYE with HMRC if you will be taking on any other employees.
6. Obtain any permits, certificates or inspections necessary as for sole traders.
7. If you take on premises you will have to register for business rates. There’s more information about those on the Business Rates page at GOV.UK.
8. Make sure that you have the appropriate insurances, employer’s liability, professional indemnity, public liability, buildings insurance and any other.
9. Make sure that any business stationery or software displays the names of all of the partners.
10. Consider investing in accounting software and/or an accountant. Most accountants offer an free initial meeting. To book a meeting with Emma Stevens Accountancy check out this page.

Setting up a Limited Company

1. Register your company with Companies House. You can do this yourself if the company meets certain criteria (check the Companies House website for details) or use an agent/accountant to organise the paperwork for you.
2. Inform HMRC that you’ve set up a limited company and create an online account at the same time on the HMRC Website.
3. Set up a business bank account. By law this must be separate for limited companies. You’ll need your certificate of incorporation and other documents to do this.
4. Register for VAT if appropriate, as above.
5. Get insured – you’ll need employers’ liability insurance if you employ anyone, plus professional indemnity if you offer advice as part of your business services. Some occupations use specialist insurers so it’s worth finding out about that, as well as public or product liability insurance.
6. If you take on premises you will have to register for business rates. There’s more information about those on the Business Rates page at GOV.UK.
7. Find an accountant – yes you could do it yourself, but a good accountant will take the stress out of the details that can keep small business owners awake at night! Invest in bookkeeping software to make it easier to keep track of finances, payroll and pensions. Most accountants offer an free initial meeting. To book a meeting with Emma Stevens Accountancy check out this page.

With all new businesses it is always useful to prepare a business plan and cash flow estimate. This will help you be clear on what you want from your business and what you need to achieve it.

All data and information provided in this advert is for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant. Emma Stevens Accountancy Ltd makes no representations as to accuracy, completeness, correctness, suitability, or validity of any information in this ad and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.