Your top questions answered
May 09 2008
At SmallBusiness.co.uk we receive a staggering number of questions on the basics of starting and running a small business. Many of the answers to these questions can be found in our Q&A forum.
To point you in the right direction we have put together this list of some of the most commonly asked questions and provided links to the full answers.
What is the procedure for registering as a sole trader?
Anyone can set up in business as a sole trader, although for certain types of work you may need a licence or permission from your local authority. Restaurants, childminders, cab drivers and street traders, for example, all need to have a local authority licence. Your qualifications and business premises may be inspected beforehand to ensure you comply with regulations…
Where can we find all the information to become a limited company?
If you decide to set up as a limited company, you must first register your business at the Registrar of Companies (Companies House).
Companies House charges a standard registration fee of £20. It also offers a premium same-day registration service for a fee of £50. Most small businesses that opt for limited company status become private limited companies rather than public limited companies (Plc)…
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What are the tax advantages and disadvantages of limited company or as a sole trader status?
Whether you trade as a sole trader or as a limited company is a key decision when starting a business. If the decision is to start as a sole trader, it is prudent to review the situation after the business has become established. Basically, a limited company provides opportunities for saving tax but it involves a higher level of bureaucracy which you must either undertake yourself or pay others to do so on your behalf…
Is it acceptable to use the title ‘director’ when operating as a sole trader?
Choosing your job title very much depends on your own personal view, and on how comfortable you feel being referred to by a certain title.
However, as Nigel Lander, an adviser with Business Link for London explains, as a sole trader, it might pay to avoid titles such as ‘chief executive’ as this could signal that you are inflating your importance…
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Where can I get information on government grants?
Go to the Business Link London website and search for Grants and Support Directory. This will allow you to search the database for potential sources of help and it contains grant and support schemes from central and local government as well as private organisations…
I have been told you can earn up to £4,999 without having to pay tax. Do I need to declare the money being earned even if it's less than this amount?
The income tax individual personal allowance (the amount you can earn before paying income tax), which is £5,035 for the tax year 2006/7, would normally be given to you as part of your code number used to calculate the income tax on you and your partner’s full time earnings. This means that any profits made above this by the part-time business will be subject to income tax and national insurance contributions on the taxable profits of the business…
How do you work out proportional costs for combined business and residential premises? Are there any guidelines?
The expenses claimed against income for income tax purposes must be “wholly and exclusively” for the purposes of the trade or business.
If you run your business from home a proportion of the expenses of the residence used for business, such as a study/office, surgery or workshop can be charged against profits. Provided a discrete room or space is for the business, it is usual to calculate the proportion of the house occupied by the business and charge the appropriate percentage of council tax, heating and lighting, etc to the business…
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There are many more answers to questions like these in our Q&A Forum. Click here to read more and submit questions to our panel of experts.
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