Starting up a new business, looking for advice

[Nova]

I am currently working on a new website which will hopefully be set up and run as a business. Currently my wife works part time and she wants to deal with the majority of the work involved ie contacting customers answering phones and emails etc. I'll probably chip in with the more technical work but aim to teach her to do so as well.

Just looking for tips on starting up, should we start it as a limited company or partnership, pros of cons for each . Just looking for tips and guidance from members on the forum.

Cheers,
Nova

 

[kate-brownhill]

Depending on the business, i would most times advise to start as a Sole trader unless you are in a high risk business where you would need the protection of a Ltd company.

Have a look here for more details:
http://www.ukbusinesslabs.co.uk/for...ntages-versus-sole-trader-basic-accounts.html

 

[Edwin]

Since there will be more than one employee in the business, it's worth going to talk to an accountant as there could be tax advantages structuring things one way or another, but it will depend on salary expectations, projected revenue, costs, and other factors. An hour or so now spent examining your specific circumstances may save a lot down the road..

 

[Bailey]

Start out as a trader and move up as and when it suits - Sometimes a lot depends on your start-up costs -nice to be able write some off - if you initial costs are high

 

[Aegean]

it's worth going to talk to an accountant as there could be tax advantages structuring things one way or another, but it will depend on salary expectations, projected revenue, costs, and other factors.

100% agree with the above, and many accountants will offer a free initial consultation.

I'd also encourage you to have an actual business plan, develop a realistic and attainable sales/marketing strategy and then stick to it. Too many small businesses fail because they don't have these fundamentals in place.

 

[Nova]

Okay thanks very much guys. A bit to take onboard. I read the link very helpful thanks. I'll sit down and look at the figures, draw up a business plan and speak to an accountant.

 

[Sussexite]

Agree with the sole trader route to start with unless.....

One of you is going to be earning lots of money and paying 40% tax or more and the other will be paying not much and earning basic rate tax.

In which case you could trade as a partnership which would channel some of the earnings towards the lesser paid of the two of you, depending on how you split ownership. You will each be taxed on your share of the partnership profits, but this % share will remain unchanged.

Please note that if your business takes off and you put it into a company later this will be treated as a disposal for capital gains tax purposes and may crystallise a CGT charge if the value of the business is more than 2 x £10,600 (assuming you and your wife own half each).