When starting a new business it’s important to think about all of the necessary aspects of your start-up, from finding business premises and hiring staff, to promoting your product and managing your day-to-day accounts.
There are also many pitfalls that you need to be aware of once you’ve got the ball rolling. Thinking about these potential pitfalls can ensure that you’re better prepared for the future, as you’ll be able to avoid them. So here are four things you should avoid when starting up a new business:
1. Mixing your business and personal expenses
Work hard to ensure that you’re not mixing your business and personal expenses because doing so will make it difficult for you to claim business expenses over time, and it could land you in trouble with HM Revenue and Customs (HMRC). It’s important to keep track of all your business expenses at every turn, as you’re only cheating yourself if you don’t claim for something that you legally have the right to claim for.
Keep your business and personal expenses separate at all times, and rather than thinking of organising your expenses annually, work to do them continuously throughout the year. This will help you stay on top of your expenses so you’ll be fully aware of what goes in and out of your account each month. This will also make it easier to claim for business expenses. Furthermore, accountants at Tax Agility can look at these financial records and help you to identify ways in which you can potentially save money.
2. Choosing an inappropriate legal structure
Depending on the size of your start-up there’s likely just two to three legal structures available to you. The structure you choose will define the paperwork that you’ll have to complete upon starting up your business, the taxes you’ll be liable to pay, the manner in which profit can be taken out of your business, and your personal responsibilities should your business make a loss.
Meeting with an accountant from Tax Agility can help to ensure that you avoid choosing an inappropriate legal structure. We can discuss whether you should operate as a sole trader, partnership, or limited company and advise on the best course of action for you and your business.
3. Not applying for eligible tax reliefs
Depending on your business, there may be a number of tax reliefs that you could be eligible for. Should you qualify for any tax relief, it is crucial that you apply for them. Tax Agility can help you to identify what tax relief your business qualifies for and can then apply for them on your behalf.
Such tax reliefs can make things easier for you, financially, and can allow you to invest more money in improving and developing your business. So don’t miss out on giving your new business as much financial assistance as you can.
4. Going it alone
Even if you’re operating your start-up as a sole trader, or you’re the owner of a brand new limited company, that doesn’t mean you have to go it alone in all other areas of your entrepreneurial venture.
Hiring an accountant, such as Tax Agility, to deal with the financial side of your start-up will give you the confidence of knowing that your new venture’s finances are being taken care of. This also means that you have more time to spend on other parts of your start-up.
Experienced start-up accountants
Tax Agility are accountants that specialise in helping start-ups to reach their potential. For more information on how we can help you to avoid these pitfalls when starting up a new business, call us today on 020 8108 0090.