Working for yourself or setting up your own business can be a daunting task, compared with the simplicity and convenience of being employed by someone else. Even if you have a full-time job, if you are earning any income from other sources then there are some simple tasks that need to be done to ensure you meet your tax obligations.
In Scotland, and throughout the UK, tax collection is administered and controlled by Her Majesty’s Revenue and Customs (HMRC). This is the government body responsible for ensuring that businesses and self-employed people pay tax on the income they earn.
A Sole Trader refers to a person working mostly on their own, providing a service or selling a product. A Partnership is effectively two or more Sole Traders working together, with some pre-arranged agreements between them on such matters as profit-sharing and liabilities. A Company, most commonly a Limited Company, is a business in its own right, which must have owners, or Shareholders, and Managers / Directors. A Company is the most complex way of conducting business but, for larger businesses, this method provides many benefits.
Whether you are starting out on your own, setting up a company, have been running a business for a while, or if you have found yourself in some trouble with HMRC, it is very important to seek professional advice from a UK-qualified accountant who is familiar with the UK tax system and the workings of HMRC.
Ask your accountant the following questions:
- Do you have experience of working with business owners similar to myself?
- Will you advise me on how to keep my business records in order?
- Will you take responsibility to ensure that all my tax returns and accounts are filed on time?
- To what extent will you provide advice and support to me to help my business succeed?
There are many documents which must be submitted to HMRC and other bodies, e.g. the Self-Assessment Tax Return, Corporation Tax Return and VAT Return and there are numerous key dates and deadlines throughout the tax year which must be met and, if missed, can result in fines and interest charges from HMRC. A good accountant should ensure that all required tasks are completed correctly and within the required timescales.
Ricky Steedman – Managing Director
Steedman & Company, Accountants & Tax Consultant