VAT
Is your business going to be VAT registered?
This means is that you charge VAT on your sales but are also able to claim back VAT on certain purchases that you make.
Key questions to ask here are the following:
What is the expected turnover of the business?
"If the value of your taxable supplies in the past 12 months or less has exceeded the current VAT registration threshold of £67,000, or the value of your taxable supplies in the next 30 days alone is expected to exceed this threshold, you should read the publication below and complete the application form." HMRC Website
- VAT Notice 700⁄1 Should I be registered for VAT?
- Form VAT 1: Application for VAT registration
- FAQ: VAT Registration - top tips for completing VAT 1 application form
If the above is not applicable, then you can opt out of being VAT registered, however, VAT registration does give a certain level of credibility to your business.
VAT Scheme
There are 2 mains types, Standard Accounting and Cash Accounting
- Standard Accounting
- VAT is due when an invoice is raised or received
- Cash Accounting
- VAT is due only when you make or receive payment
- Excellent to help cashflow as you only pay money when you have physically received it from your customer
- You can be part of the scheme providing your estimated turnover is less that £1.35 million (you can operate on the scheme until your turnover exceeds £1.6 million)
- If you have began trading but have not been VAT registered then you can claim back VAT for up to 6 months prior to registration for services and up to 3 years for capital purchases still owned.
Insurance
All businesses need insurance, the type and level of insurance depends on the type of business which you run. Types of insurance which may be relevant to you are:
- Office⁄Factory contents insurance
- Employer liability insurance
- Product liability insurance
- Public liability insurance
- Professional indemnity insurance
If you would like more information on insurance then please contact us via the More Information section.
