As agents registered with HM Revenue and Customs for online registrations, Green Accountancy can take care of all your registration procedures.  We do this at no extra charge for clients.  Please contact us by telephone or email should you wish to discuss this further.

All Contractors and Businesses
It is important to set up a separate businesses bank account.  In terms of your overall finance this will still be part of your personal assets or liabilities.  The separate bank account will receive all business monies (from customers, loans, sale of assets and your investment) and pay out all business expenses.  You should then transfer funds from your business account to your personal bank account and pay for all personal expenditure from your personal bank account.  These transfers are your drawings from the business.

If you are going to pay employees you must register a PAYE scheme with HMRC.  You must register before paying anyone; registration can be applied for up to four weeks before the first pay date.  If someone who works for you is self employed you should think very carefully about whether they are truly self employed.  HMRC may later claim they are actually your employee and, if they are correct, you will face tax, national insurance, penalties and interest that could exceed the amount you have ever paid the person.  If you are in any doubt on this point then you should treat them as an employee or take further advice.

You must register for VAT if your turnover exceeds £79,000 in the last twelve months, or you expect your turnover to exceed £79,000 in the next month or if you take over a VAT registered business.  You may want to register voluntarily; typically this you will want to do this if you expect all of your customers to be VAT registered businesses.

Sole Traders
The simplest form of trading is to set up as a sole trader.  A sole trader is an unincorporated trade owned by one person.  You may still have employees, premises and a business name.

You must register with HM Revenue and Customs by completing (form CWF1) and begin paying class 2 (flat rate) national insurance (form CA5601).  CWF1 must be received by HMRC within 3 months of starting to trade otherwise a fine of £100 will be incurred.  We strongly recommend that these forms are submitted as soon as you begin to trade.

If there are two or more people owning a business then we generally recommend a limited company structure.  However, there are circumstances where an unincorporated trade is preferred.  An unincorporated trade with more than one person is a partnership.  When forming a partnership it is strongly recommended that all parties take independent legal advice and that a partnership agreement is drawn up.

Registration is similar to a sole trader, each partner being required to submit both forms CWF1 and CA5601.  Additional forms registering the partnership itself are also required.

Limited Companies

See Limited Companies.  Creating a limited company yourself is not cost effective.  You should use an agency such as Green Accountancy to form a limited company.  Once formed, a company must register with HM Revenue and Customs by completing form CT41G.  Almost all companies require a PAYE scheme as, at the very least, there will be salary payment to a director.