Thinking of starting a new business?

Starting a new business can be an exciting, but daunting process. There are a number of areas that need to be considered at an early stage, including deciding on the appropriate structure for the business.

Many small businesses start off as sole traders, however it may be beneficial to start as a partnership, limited company or limited liability partnership. The appropriate structure will  depend on the size of the business, involvement of others, tax and VAT issues, financing requirements, personal liability, retirement plans and many other related matters.

 

There is a common myth that where individuals trade through limited companies, they pay no tax. Whilst individuals can currently withdraw up to £5,000 per year in dividends from a company tax free, any dividends drawn above this will be taxable at 7.5% for basic rate taxpayers of 32.5% for higher rate taxpayers. The company will then also pay corporation tax on profits at 20%, which is the same rate currently as income tax for basic rate taxpayers.

A good accountant will be able to gain an understanding of the business and its owners by asking the relevant questions, listening to the responses and recommending the best way forward. Seeking the appropriate advice at an early stage will be a worthwhile investment, ensuring things are set up correctly from the start. Failure to do this may prove costly and time consuming in the long run.

If you would like to discuss any aspects of starting a new business please contact us for an informal, no obligation meeting. For more details go to  http://www.lentells.co.uk/services/specialist/starting-business