Company Formation and Tax Registrations

If you’re about to start up a new business or buy an existing one, company formation and tax registrations need to be high on your “to do” list. We can help!

Limited Company Formation

A limited company is a separate legal entity. Trading through a limited company usually has a number of benefits but there are also costs & consequences, so it’s usually a hard decision to make. But we’re here to help you make it.

We can help you understand the pros and cons. If you decide it is the right way to go, we can help you convert your existing sole trader or partnership business or form a limited company for your new business.

Limited companies are very quick and cheap to set up via formation agents or directly with Companies House, but if you need advice or guidance, neither will be able to give you the information you need nor help you make a decision. If you make a mistake, either by choosing a company when it’s not right for you, or setting it up wrongly, the consequences can be costly in terms of money and time to rectify. We’re here to help you avoid mistakes and get it right first time!

Value Added Tax (VAT)

VAT is a particularly complex tax. At 20% of turnover, not profit, it can literally make or break a business. Some businesses will be required by law to register for & charge VAT, and face hefty losses if they don’t. Other businesses may not be required by law to register, but may benefit from voluntary registration. If you’re buying a VAT registered business, you may have to register with effect from the changeover date. We can help you decide when to register for VAT, which sales to charge VAT on, what VAT can be reclaimed on your expenses & purchases, and what records you need to keep.

Payroll (PAYE)

Employment taxes another complex area. If you employ anyone, you’ll probably need to register with HMRC as an employer and apply PAYE deductions to wages paid. If you engage occasional workers or self employed contractors, you need to protect yourself and understand the HMRC “employment status indicator” as your “self employed” workers could be deemed by HMRC to be your employees, leaving you with a hefty tax/nic bill to pay! If you’re taking over an established business, you may have to take over their staff (under TUPE) and will need to understand the liabilities you are taking over, such as accrued holiday pay, redundancy rights, etc.

Self Assessment (SA)

Sole traders and partnerships need to register for and complete self assessment income tax returns. Limited companies need to register for and complete self assessment corporation tax returns. Directors of their own limited companies may have to register for and complete both.

Construction Industry Scheme (CIS)

If you work in the construction industry, you are likely to need to register under the CIS scheme. If you are a main contractor, you’ll have to register yourself as a contractor and then submit details of all payments made to your sub-contractors (and deduct tax from payments made to them if applicable). If you are a sub-contractor, you need to register under CIS to prevent 30% tax being deducted from payments made to you by your main contractor.

We can help you decide whether a limited company is your best option and which taxes you need to register for and help you register. All of the above areas are ripe for causing confusion, and errors are usually expensive in terms of HMRC penalties if you get things wrong.