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Setting up a business

Starting a new business? How you set it up will also affect what tax you pay, along with when and how you pay it. We can help…

One of the most common questions we get asked by new start-ups is should I be a sole trader or a limited company?

The set up process for a sole trader is simple. The business owner will be subject to minimal paperwork throughout the year and it offers greater privacy as information cannot be found freely on Companies House.

However, the owner of a sole trade is personally liable for any debt that the business accrues, meaning that if things go wrong the owner’s personal assets could be at risk.

Setting up as a limited company provides a legal distinction between the owners and managers: as a result personal assets are not at risk if the company finds itself in hot water. But running a limited company also comes with greater responsibility such as preparing a range of paperwork annually, which can be costly and time consuming.

A limited company gives the owner the flexibility to take money out of the company to suit their personal tax needs – perhaps as a salary, as dividends, or a combination – but limited companies also pay corporation tax on their profits. If you are self-employed, you simply pay income tax on the total profits of the business.

You’ll need to look at your own situation in full to determine the best route to take, and that’s where we can help as an accountant’s advice and expertise will be invaluable.

For more information or guidance on setting up a business, email Rachel Pugh 01494 552 116 or Tim Fulker 01494 552 145

Check the link below to see our handy New Business Checklist in PDF format.

New Business Checklist

If you require a service not listed here, would like a free consultation or a quote or have any questions about what Seymour Taylor can offer you, please let us know and we can advise on next steps.

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