Month: May 2018

What you need to know before setting up limited company.

We receive a number of questions here at Ascentant, both from clients and online via #AskAscentant. Here Kevin Drew, Managing Director answers some of the common queries that new businesses ask.

 

Q – What taxes or filings are due for a limited company?

A – A limited company must complete an annual return (confirmation statement) on the anniversary of incorporation. Thereon a limited company must file annual accounts with companies house and a corporation tax return to HMRC. Directors must complete an annual self assessment tax return. VAT and payroll filings may also be applicable if registered for these schemes.

 

Q – Who do I need to register with?

A – When setting up a Limited Company, you will need to register with Companies House for company registration and HMRC for tax filings. Depending on the type of business, it may also be necessary to register with the information commissioner (ICO) if holding data.

 

Q – How can I pay myself?

A – It is recommended to set up a payroll scheme to pay directors via monthly payroll, paying tax and NI monthly. Once profits have accumulated into retained earnings, directors can also take dividends from the business, utilising their annual dividend allowance.

 

Q – Can I claim expenses working from home?

A – There are set allowances that can be claimed for working from home without receipts. You may also be able to claim proportionate expenses for heat and light expenses.

 

Q – What other expenses can I claim?

A – You can claim mileage or petrol allowances, the cost of phone calls and other incurred expenditure, relating to the business. Business expenses are tax deductible if incurred for business purposes.

 

Q – Can I obtain business finance?

A – As a Limited Company, it may take some time to build up a credit rating before the business can obtain finance. You should be able to open a bank account and apply for an overdraft. Any loans or other finance may require a personal guarantee by a director until the business is credit worthy.

 

Q – How much will accountancy fees cost?

A – Accountancy fees vary widely for Limited Company accounts, but usually range from £750 – £1,500 + VAT for a basic set of financial statements. More complex accounts will cost more.

 

Ascentant are Bookkeepers, Accountants and Business consultants. We are based in Derby with a small office in Nottingham and London.

SOLE TRADER FAQ

What you need to know before setting your own business as sole trader.

We receive a number of questions here at Ascentant, both from clients and online via #AskAscentant. Here Kevin Drew, Managing Director answers some of the common queries that new businesses ask.

 

Q – What taxes are due for a sole trader company?

A – A sole trader will need to complete an annual self assessment tax return and pay tax/NI on profits. Payments on account may be required to pay tax twice a year in January and July depending on the amount due.

 

Q – Who do I need to register with?

A – You should register with HMRC for a UTR number when beginning self employment.

 

Q – How do I register my business name?

A – You cannot register a company name as a sole trader, however you can choose a trading name to trade under. You should check that you are not infringing on a trademark or passing off another named business.

 

Q – Who is liable in the event of a legal dispute?

A – Inn the event of a legal dispute, you will be sued personally unless you have suitable insurance. You and the business are the same legal entity.

 

Q – Can I obtain business finance?

A – If looking for a loan or business finance, you and the business are the same entity. You will therefore need to offer a personal guarantee against any business credit or finance.

 

Q – How can I pay myself?

A – You can withdraw profits from the business, but it is not classed as remuneration as you are not an employee.

 

Q – Can I claim expenses working from home?

A – You will be able to claim a deduction for mortgage interest, rates and light and heat if you have an office at home.

 

Q –What expenses can I claim?

A – You can claim capital allowances on the purchase of a computer, but mobile phones will be subject to a private usage adjustment. You will be able to claim tax relief on expenses incurred wholly and exclusively for business.

 

Q – How much will accountancy fees cost?

A – Generally a self assessment tax return will cost around £100+VAT and production of a set of financial statements or accounts in the region of £200 – £300.

 

Ascentant are Bookkeepers, Accountants and Business consultants. We are based in Derby with a small office in Nottingham and London.