The Benefits of Small Business Accountants
There are many things to consider when starting your own small business that chartered accountants can help you with. And it´s not just all about tax and book keeping! At Taxaccolega, a low fixed fee accountant, for example, are qualified professional will help you put together a business plan and lay the foundations of your small business.
Should you be a Limited Company or Sole Trader?
As small business accountants, our first recommendation is that you decide whether you wish to trade as a sole trader or a Limited company. The importance of this decision is because your legal requirements and tax obligations differ from each other and depending on which route you choose to take will have an effect on the types of documents you have to sign and submit.
As a sole trader you and any of your partners are the business. You are self-employed. You must start to pay your class 2 National Insurance contributions to HM Revenue and Customs (HMRC). You will also pay tax on the business profits (or your share) according to the prevailing personal tax rates at the time. Any money in the bank is yours, and can e used without affecting your tax.
As a Limited company you are not the company, instead the company is classed as a separate legal entity. You become a director of the company and a shareholder. As a Director you are an officer of the company, this means you are responsible for making sure the company meets all of the submission deadlines set by HMRC. The company pays corporation tax on its profits. These profits aren’t yours; they belong to the company.
As directors there are two ways to extract money from your small business. These can be paid a weekly or monthly wage through the companies PAYE scheme, you can also receive payments in the form of a dividend. Regular wage payments through PAYE will be subject to all of the normal tax and NI deductions that you would be liable for when working for someone else.
Dividends are normally larger distributions of money that are paid to shareholders according to the number of shares they own, and whilst you still pay tax on these (through your tax return, not PAYE) there is no NI liability. As a Limited company you and your fellow directors are not personally responsible for the company´s debts.
How small business accountants can help ?
Taxaccolega specialize in helping you to make all kinds of decisions. Whether it is the tax status of your new company, general business start-up advice, completion of VAT returns or personal tax planning, we are experienced accountants for Ltd companies and sole traders and are here to guide you.
We really appreciate how different every client’s requirements are, whether you are looking for online accounting services for your small business or an office where you can come and have a chat, we cater for everyone. If you are thinking of becoming self-employed, or need to change your existing small business accountants then get in touch with Taxaccolega, a low fixed fee accountant, on 08000 235 234 or email firstname.lastname@example.org