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Starting a business podcast

Malcolm McKinnell & Andrew Webb from Ward Williams

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1. If you’re thinking of starting your own business what should be your main considerations?

Answer: Andrew Webb, Business Services Director for Ward Williams

“The main considerations should be:

  • What funds you would need to put into the business to establish your initial working capital.
  • Are there any legal requirements, for example is your proposed business in a regulated area?
  • How much income will you need?
  • What business costs will there be in the first year?
  • Do you need help raising finance for your business? What professional advice would you need to support this?
  • You should also estimate the taxation of the business and how much you could minimise this to keep more of what you earn”.

2. What structure would suit me and why?

Answer: Malcolm McKinnell, Co-Founder and Partner at Ward Williams

“There’s a number of structures that you could use, probably the main ones are limited company, self-employed or a partnership. These vary depending on your personal circumstances.

The major things to consider are things like cost; limited companies are more expensive to operate. You’ve also got tax efficiency, depending on your circumstances. One may be better for you than the other. You’ve got to think of what your customer / supplier wants to trade with. Limited companies can give you more credibility, and limited liability”.

3. So what tax issues would I need consider?

Answer: Andrew Webb, Business Services Director for Ward Williams

“It would be important from the start to register your new business with the HMRC, as soon as you start trading. This can easily be done online.

A company will be liable for corporation tax on its profits. A self-employed person is liable for income tax and national insurance though the self-assessment tax regime. If you have staff, then you have to consider PAYE taxes and you may need to register VAT”.

4. What do I need to be aware of before taking on a member of staff?

Answer: Malcolm McKinnell, Co-Founder and Partner at Ward Williams

“Well this is a big issue that a lot of people face and do worry about. The main thing is setting up a payroll for the company or business. And working out taxes and obviously paying your staff.

But there is now the workplace pension scheme which most people will have heard of. You have to enrol staff for a pension.

You also have to think about contracts of employment, there are lots of other employment legislation these days that protect employees. So you’ve got to think of things like holidays, sick pay, maternity pay, all that sort of thing.

Again, when you interviewing people, you need to record details about the interview. For example why have employed them. As people are aware there’s a lot of potential discrimination out there these days. Again Ward Williams have a HR department called Ward Williams HR which can support your though the potential minefield”.

5. What bookkeeping records would I need to keep?

Answer: Andrew Webb, Business Services Director for Ward Williams

“You need to keep proper books and records, it’s a legal requirement. It’s also important to maintain accurate and up to date records that’s going to be the life and blood of the business.

A standard bookkeeping system requires processing sales, purchases, receipts and payments. Besides processing payroll and maintaining employee records. You also need to do bank reconciliations. There will also be the production of the reports required for management and the accountant that’s required later for preparing various documents for filing.

The hot topic today is HMRC’s new Making Tax Digital (MTD). So from next year, most businesses will need to operate a computerised bookkeeping package. Ward Williams are Xero Gold Partners and can provide assistance or even a fully outsourced bookkeeping service”.

6. And what about VAT? – Malcolm

Answer: Malcolm McKinnell, Co-Founder and Partner at Ward Williams

“VAT, well that is a big problem for a lot of business, if you get it wrong there are some quite penal penalties. For most small business when they start out, VAT and whether to register is optional but once you start running the business successfully and the turnover is over £85,000 then you must register for VAT. And what that means is you’ve got to add a further 20% on top of your normal prices which gets paid over to the government. The advantage is that on all your payments that have VAT on them you can reclaim that. Whereas if you’re not VAT registered that is a cost. Now, for most businesses that you’ll be dealing with. Hopefully your customer will be VAT registered and that 20% won’t increase the cost to them. But what would you should be aware of is, if you’re dealing with a member of the public. Then that’s going to be an extra cost.

As soon as you start you can register optionally and a lot of businesses do this to keep the costs down. There are simplified schemes like the flat rate scheme for small businesses and also there’s various rules and regulations if you trade in Europe”.

7. What ongoing accountancy and tax matters do I have to consider?

Answer: Andrew Webb, Business Services Director for Ward Williams

“You may need management accounts, so you are able to check on your businesses growth, trends and business profitability. Ward Williams prepare financial accounts to meet statutory filing requirements and for tax planning purposes. There are fixed submission deadlines for filing annual accounts and tax returns at the various government departments. It can be quite penial if you don’t meet those liabilities.

  • Company accounts and tax is due 9 months after the accounting period end date.
  • Self-employed tax returns need to be filed by the 31st January following the end of the tax year. And taxes are due on 31st July and 31st January.
  • For Payroll you usually have monthly events to make some sort of electronic payment.
  • VAT returns are normally filed quarterly with any VAT that is due”.

8. What other business support services can Ward Williams Chartered Accountants provide?

Answer: Malcolm McKinnell, Co-Founder and Partner at Ward Williams

“Ward Williams provides many services to clients, probably the main ones that people starting their businesses need are things like a business plan. There are many businesses out there that don’t even think of a business plan. The main benefit is it focusses your mind what you’re doing, why you’re doing it, Is it going to be successful? And the banks might need it if you’re wanting to raise finance. Marketing, show you who your competitors might be. There’s a lot of reasons to do, even a basic business plan when you start out.

Once you’re going, we can do budget’s for you. Again you need to see what your costs are going to be, how much income you need in order to make a profit, and earn enough to live on from the business. Then we provide you with management accounts, which shows how you are doing compared to your budget. As that’s vitally important as you can’t wait till then end of the year, Once the year end is up, you can’t go back and change how you’ve have performed.

The final thing that I would say is at Ward Williams we look at the whole picture and that also includes your personal affairs, not just the business affairs and that’s because the two are interlinked in many ways. There’s no point doing something that benefits the business if it’s not benefitting you and the family personally”.

Where is Ward Williams based?

“We have offices in Weybridge, Ascot, Bracknell and Uxbridge as well as an office in London”.

Office locations

How can people get in touch?

For further information from Ward Williams on starting a business and what you need to know. Please contact Malcolm McKinnell or Andrew Webb on 01932 830664 or visit our website: www.wardwilliams.co.uk