One of the most common questions we are asked by a new company director is: what do I have to do now?
The answer is very simple: mind your own business.
Your priority is to get your business up and running and to be successful. We will help you with meeting all of your statutory obligations as a company director.
As a company director, you have a legal obligation to keep proper company accounts and meet the legal filling obligations. Whilst you can delegate that function to us, you retain ultimate responsibility, because of your position as an officer of the company.
You will need to obtain Public Liability insurance as soon as you start working. Insurance cover protects you as well as your customers, and is a legal obligation.
You will need to check if you need any other cover (such as employers liability, Professional Indemnity, medical cover etc.). And you may need to take advice from a broker on this, depending upon the nature of your work.
It is vital you get the correct cover and that you fully disclose what you are doing. This is a key responsibility of being a director.
The company is normally formed with you as the sole director and shareholder.
If you wish this changed, it is best to do this right at the outset; but it can be done at any time.
You may want to take advice from us about the structure of the company before making these changes to ensure all tax and legal issues are considered.
Adding another company director can make the administration of a business easier, but also gives them almost unlimited authority.
We do this for clients for free.
This is probably the first thing to do. If we formed your company for you. You should have a pdf of the Certificate of Incorporation. You will need to take this to the bank to correctly identify your company.
At the present time, we suggest the quickest way to get a business bank account is to approach your current bank, as they should know you; and this should make it easier to get a business bank account.
We can introduce you to other banks, if that is your preference.
Your spouse/partner can be a signatory on the bank account, even if they are not a director or shareholder. This can be very helpful if you work abroad and need matters attended to in your absence.
If you need foreign currency accounts, then you should request this straight away.
If your turnover exceeds the VAT registration limit of £85,000 (at March 2019) then you need to register. You can voluntarily register if your income is below that level.
If you are charging the Flat Rate Scheme, cash accounting, Annual Accounting or have complex activities then you should speak to us prior to registration.
It is your responsibility to notify us if you near or exceed the VAT threshold. There are penalties for late registration and our psychic abilities are limited.
We do this for clients for free.
If you pay anyone more than the NI limit of £166 per week (as from March 2019) then you must register as an employer and deduct taxes and report then to HMRC.
We can also help you meet your Auto Enrolment requirements.
We do this for clients for free.
Done. This happens automatically when you form the company. You will get your Tax Reference sent to your Registered Office automatically in about two or three weeks. It is in the format 123/12345 67890, and you should sent it to us so that we can register with HMRC as your agent.
If you are going to be VAT registered then you should get a committed accounting package. Even if you are not earning that much, then you should still seriously consider that anyway.
We can help you set it up, manage it, and tell you how to interpret the output.
Your business income less your business expenditure is your profit. This is not the same as the cash in your bank account, as you might have bills you haven’t paid yet. You must allow for the VAT you have yet to pay too, as that money is only resting in your account.
Of the profit, 20% belongs to HMRC for Corporation Tax and the rest belongs to the shareholders.
You will probably extract this as dividends, on which personal income tax will be due at 7.5% or 32.5%, but speak to us about this.
[This is only general guidance, the tax rules are much more complex and we can’t hope to cover it all fully here]
