Starting a Business
At D V Mannion & Co we welcome people who are about to start in business, or those with new businesses, to come and talk to us.
How can we help you?
Cash flow– You need to pay particular attention to your cash flows from the beginning. We can help you to plan how you are going to make sure you have enough cash.
Bookkeeping- We can help to get the best bookkeeping system up and running for your business.
Tax- Taxes are a cost which we will help you to manage. We will also help you to save taxes.
What are you going to be? A sole trader, partnership or limited company? Before you choose you need to consider the following:
-use of car for business purposes
-tax planning preparation
Have you set out your business plan objectives in writing? Are you qualified to do the business that you want to start? How are you going to finance the business? What do you expect from sales, profitability and investment in assets? Have you put all this information in a formal business plan?
Even if you don’t want to borrow money, a good business plan will help you to understand your current position and give you a good indication of how the business should perform. At D V Mannion & Co we know that a good business plan is imperative to your business.
Banks and Finance companies
You should identify a “friendly bank manager”. As this can be one of the most important contacts for your business it’s important that you’re well prepared for that first meeting. A D V Mannion & Co we have well established relationships with all the major banks and are able to help you prepare for meetings with them.
VAT (Value Added Tax)
You need to decide whether you should register for VAT from the time of starting up. Whether you decide to register now or in the future, the profitability and the cashflow of your business will be affected.
One of the advantages of registering for VAT when you do start-up is you’ll be able to reclaim VAT on purchases made before you start trading. But if it is better to register at a later point in time it is possible to reclaim VAT prior to their registration provided the claim is made on time.
Tax Problems to avoid!
-Tax Penalties – As soon as you have set a start date, ensure that you notify Revenue of your intention to commence business. If you don’t, you face penalties for failure to notify Revenue that you are liable to tax.
-VAT Penalties – Do not send VAT invoices to customers if you are not registered for VAT, as this is considered to be fraud. If you do register for VAT submit your returns and pay your dues on time to avoid late filing penalties, interest and surcharges.
-Missing Invoices – Always obtain a proper invoice for any business purchase and a VAT invoice if you are registered for VAT. If you fail to do so, you may find that your claim for tax relief will be denied, as will your VAT reclaim.
-Company Car – whether you are self-employed, a member of a partnership or operating as a limited company, planning for the use of a car in your business needs to be considered. Self-employed individuals and partners need to keep a file of actual motor expenses and a log of business mileage to backup any claim for tax relief. Limited company owners will need to compare whether the cost of using a car owned by the company will be more cost effective than using a privately owned vehicle for business purposes. The tax implications vary considerably and a careful review should be done to maximise any reliefs.
Simona Petraskaite ACCA