Posts Tagged 'business start ups'

What They Don’t Tell You About Starting a Business

Congratulations on becoming self employed! This is an exciting time however there are a few key points to remember to make the process go as smoothly as possible:-

Tax & National Insurance

If you were previously an employee you didn’t have to worry about this as the payroll department deducted them automatically and you received the balance.

As a self employed person you will now have to pay two types of national insurance, as well as paying two years worth of tax in the first year of trading.

National insurance

You will now pay class 2 contributions, which are set at a fixed amount per week.

In addition, you have to pay class 4 contributions payable, based on the profit at the year end. Currently 9 percent.

Tax

As a self employed person you pay your tax by the 31st January following the end of the tax year. This for all practical purposes the 31 of March.

However, to make up for this benefit the revenue also ask for payments on account for the following years estimated tax – on 31st January and 31st July each year.

Therefore after your first year, your tax bill may actually be 150% of the amount you were expecting, with a further 50% due in July.

These forward payments are then netted off against the following years tax.

It is important to provide for these liabilities to ensure that interest charges and late payment penalties do not arise, which can significantly increase your liability. 

Tax deadlines

It is also important to ensure that deadlines for registration and submitting returns are followed in order to avoid needless penalty charges arising. 

You are the whole operation

A good question to ask a room full of self employed people is ‘who here works in sales?’ – the actual answer is that everyone does!

As a self employed person you are now also your sales department, admin assistant and chief bottle-washer.

It is important to realise that you may have to spend a significant amount of your time on tasks that you had not planned on and for which you don’t have the skills or knowledge.

Get ahead with expert help, this can be cheaper in the long run and you can avoid mistakes by learning from other’s experience and training.

Many self employed people think that one way to save money is to do everything themselves, such as their web site, sales/marketing, tax returns, etc.

However, if you work out the number of hours this actually takes at the rate you could earn from a client or customer, combined with the results then you could actually find that in many cases that you could save significant money, time and hassle by getting some help at an early stage.

If you want to know more about the above issues so that you can get the answers you need before you start your business please contact Edward at edward.tudor@hcba.co.uk or call him on 01483-453755

Sc: UKBA

 

Start ups Lack Only Finance and Information – Survey

A survey has found that 25% of the population would like to start their own business and are only prevented from doing so by a lack of information and finance. (No s**t Sherlock!).

This brilliant survey also illuminated us with figures like: 4.2% of us are in the process of setting up a business and 3.4% already do so.

Those aged between 33 – 44 quoted finance as being their major barrier while young people state a lack of information to be the culprit.

Speaking personally I’m not sure that this survey has actually added anything to our knowledge on the problems involved in business start ups.  However if you would like to know more, click here.

So what do you think about this?  Does this survey tell us anything new?  Let me know at martin.parry@mgba.co.uk or fill in the comment box below.

Sc: MGBA / UKBA

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Start Ups Seek Alternative Finance

Young entrepreneurs, disillusioned with traditional methods of funding their business plans, are seeking new ways to resolve their funding requirements.  So says Saurev Chopra, MD of Huddlebuy.co.uk having spoken to over 1000 small business owners.

Almost 75% of young entrepreneurs are saying they will have no option but to seek alternative funding options in 2012 if they are to maintain their business development plans during the year.

Craig Hamer, Dews Motor Group, said: “The banks are now the last place businesses think about for investment and funding”.  The reality is that, for businesses, bank lending has gone from bad to worse despite The Coalition’s rhetoric and much- maligned Project Merlin.

However where banks are failing others a spotting opportunities and bodies are getting together to offer business leaders the funding opportunities they need.  Groups like Zopa, Funding Circle and Crowdcube are just a few of a whole industry beginning to plug the gap.

MGBA are dedicated to working with small and start up businesses and can offer help and guidance in business planiing and funding.

If you have questions, thoughts or comments on this post or my blog please drop me an email to  Martin.parry@mgba.co.uk or leave a comment below.

http://www.mgba.co.uk

http://www.zopa.com

http://www.huddlebuy.co.uk


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