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Setting up your first business can be daunting. No matter how many years you’ve worked for other companies, you can never be fully prepared for setting up your own.

That’s why we’ve come up with all the essentials you’ll need to know before and during the setting up of your first business. This will help you keep on top of all the bits and pieces that need taking care of, including your responsibilities, handling accounts and completing forms.

Getting set up

There’s a few things you should have completed before you jump in to contacting Companies House. These should include, choosing a company name (and some backups), picking a registered address, choosing your shareholders and directors and completing a Memorandum and Articles of Association. You can find an extensive list of everything else you should do before setting up your company here.

Once you’ve got everything in order, it’s time to go ahead and get your business set up. You can do this yourself or outsource, to make sure all bases are covered.

The first step to getting set up is to register with Companies House. There are several ways to register.

Online applications take up to 24 hours and cost £12, while postal applications take up to eight to ten days and cost £40.

You’ll also be required to register for Corporation Tax with HMRC. This can be done easily through their website. You’ll need your Unique Taxpayer Reference (UTR) number (which you’ll receive from HMRC when you set up your company), your company’s registration number, the date you started to do business and the date your annual accounts are made up to.

Your responsibilities

As the director of a limited company there will be a number of responsibilities you’ll have when it comes to your business.

The directors of the company must also complete an annual Self Assessment Tax Return. This shows your salary and dividends from the company. You will also need to note any other undeclared income. You can find the full checklist for completing your Self Assessment Tax Return here.

Payroll

As the director of a limited company, you are also an employee. You’ll need to register your business as a new employer and set up a payroll scheme to make sure that your salary has the correct amount of tax deducted.

Many accounting firms will be able to help you in setting up your payroll and managing it. All you’ll need to do is keep payroll records, with information of rates of pay and hours. You may also need to set up a PAYE scheme if you have at least one employee earning £112 or over a week.

VAT

Depending on the turnover of your limited company, you may be obliged to register for VAT. If it’s not compulsory for your business, it may still be more tax efficient for your business to do so.

In order to avoid a penalty, you should register within 30 days of the business turnover exceeding the VAT threshold. If not obligatory, you should speak to an accountant about whether you should register.

You can find more information on registering for VAT here.

Managing finances

Other than setting up payroll, there will also be a number of other financial tasks you will have to stay on top of to avoid penalties. These include; filing records, bookkeeping, setting prices and sending invoices.

An accountant will be an invaluable resource if you’re setting up your first company and have little experience of business finance. Not only will they be able to help you with your accounts and getting finances in order, they’ll be able to give you advice on the best ways of running your company, and how to stay tax efficient.

If an accountant isn’t in your price range, you can still keep on top of finances with an online cloud accounting software. This is favourable to the old spreadsheet solution, as you can access and update them from anywhere.

Need help setting up your limited company? Speak to one of TAP’s advisors on 020 3355 4047 to see how we can help. If you have questions, feel free to leave them in the comment section below!

About The Author

Lee Murphy

MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.

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