1. When you set up your business you have 13 weeks in which to inform the Inland Revenue that you are a business owner. If you miss that deadline then you could be charged a £100 penalty fee. This is where you need a good accountant who can show how some of your initial activity relates to pre-start up costs etc. If you are self-employed click on HMRC to register.
2. It is vital to set up a separate business account because then if the Inland Revenue decide to investigate you they are limited to looking at the transactions in your business account. If they want to extend their investigation then they need to go and ask for further powers. It does make sorting your accounts out much easier too as all transactions go in and out the same place. Which banks?
- Abbey offers free banking for life. There are no major catches but they encourage business owners to do everything on line as there are limits such as cashing no more than 100 cheques a month;
- The Co-Op bank interested me because my personal account is with their Internet bank. They offer free banking for life for as long as you are a member of the Federation of Small Businesses; and
- HSBC has a good package if all your transactions are online.
3. It is worth having the services of a good accountant because he/ she can save you a lot of money by helping you identify allowable expenses. For example, did you know that if you work at home then you can claim £1,000 a year towards electricity, gas and heating costs? I can highly recommend Will Farnell. He gives very generously of his time and before setting up his own business, worked for PricewaterhouseCoopers.
In other words don't do what I did and leave it until the last minute! So what tips can you add to this list? Feel free to drop them down in a comment at the end of this post.