TAX GUIDE
Financial decisions are never easy to make,
especially if you are at the start of your
career. Leapfrog have teamed up with Yannons
Chartered Accountants (
www.yannons.co.uk ) to provide with
a tax guide which will hopefully be of help
to you.
Employed vs self-employed
What is a Limited Company?
Features of Limited
Companies
Registering with
a Tax Authority
Tax Calender
Accounting and Book
Keeping
Accounting Records and
Record-keeping
Value Added Tax
Payroll Taxes
Income Tax and Corporation
Tax
Insurance
Selecting Professional
Advisers
Useful Names, Addresses
and Telephone Numbers
Employed
vs self-employed
When offering consultancy services, one
often has the choice of being treated as
an employee of the client or operating on
a freelance basis. Due to the reluctance
of large corporate bodies to engage the
services of a sole trader, the freelancer
would have to operate through their own
private limited company.
Whilst most of us are familiar with the
concept of employment and being paid a salary
which is subject to deductions for PAYE
and National Insurance ('NI'), the prospect
of owning and running a limited company
may seem rather daunting. However, significant
tax savings may be made by operating as
a limited company as illustrated below:
Income for year £50,000 Tax/NI liabilities
arising for an employee £14,906
Tax/NI liabilities achievable for limited
company freelancer £10,922Note: Based
on 2003/04 tax rates and allowances.
There are many situations in which the
above tax savings may not be achievable
(see later) so it is vital to consult with
an accountant before making a decision to
operate through a limited company.
For information of users:
This guide is published for information
only. It provides only an overview of the
regulations in force at the date of publication,
and no action should be taken without consulting
the detailed legislation or seeking professional
advice from this firm. No responsibility
for loss occasioned by any person acting
or refraining from action as a result of
the material contained in this guide can
be accepted by the firm.
What
is a Limited Company?
A limited company is a separate legal entity
that exists under the authority granted
by statute. A limited company has substantially
all of the legal rights of an individual
and is responsible for its own debts. It
must also file tax returns and pay taxes
on income it derives from its operations.
Typically, the owners or shareholders of
a limited company are protected from the
liabilities of the business. However, when
a limited company is small, creditors often
require personal guarantees of the principal
owners before extending credit. The legal
protection afforded the owners of a limited
company can be useful.
A limited company must obtain approval from
Companies House to use its proposed name.
A limited company must also adopt and file
a Memorandum and Articles of Association,
which govern its rights and obligations
to its shareholders, directors and officers.A
limited company must file annual tax returns
("Corporation tax returns") with
the Inland Revenue.
Recent changes to pensions legislation and
tax changes in budgets have tended to favour
the limited company route as a means of
paying less tax. The potential savings by
going down the company route do need consideration.
However there are other factors beside the
tax implications that should be borne in
mind. Key items are summarised in the following
table.
Features
of a Limited Company
A company must be formally incorporated
with a written constitution in the form
of a Memorandum and Articles of Association.
There is, therefore, an initial setup cost.
Companies are governed by the Companies
Acts. A company must:
• Keep accounting records
• Produce audited accounts (if turnover
> £1m) NB threshold due to rise
to over £5m
• File accounts and an Annual Return
with the Registrar of Companies. This information
is available to the public.
• Keep Statutory Registers
Incorporation does not guarantee reliability
or respectability but gives the impression
of a soundly based organisation. Personally,
there may be prestige attached to directorship.
Tax is payable on directors' remuneration
paid via PAYE on the 19th of the following
month. Corporation tax is payable 9 months
after the year-end.
Losses in a company can only be carried
forward to set against future profits.
For profits up to £300,000 tax is
generally charged at 19% (2003/04)
There is both employers' and employees'
national insurance payable on directors'
salaries and bonuses.
Registering
with a Tax Authority
A significant task for the new business
owner is assuring that the business is properly
complying with the extensive tax and information
filing requirements imposed by the various
authorities. Problems and penalties could
arise if the new business is not registered
with the appropriate tax authorities in
a timely fashion. While this chapter is
not intended to be an all-inclusive list
of filing requirements, it summarises some
of the more prominent requirements common
to most businesses.
Inland Revenue
It is necessary to notify the Inland Revenue
of your existence by completing forms CT41G.
The form notifies the Inland Revenue of
your accounting date, your accountant, and
also enables a PAYE (Pay As You Earn Scheme)
to be set up, which is a requirement if
you are to be an employer.
H M Customs and Excise
You need to consider if it is beneficial
to be VAT registered from the outset. The
pros and cons are discussed later. If you
are registering for VAT, form VAT 1 needs
to be completed.
Tax
Calender
The following summarises some of the more
significant filing dates for a corporation
using a calendar year end. Naturally, if
a year-end other than 31 December is used,
some of these dates will vary.
Annual Events
Date Return
19 May Submission of forms P35 and P14's
6 July Submission of form P11D
19 July Payment of Class 1A NIC
30 September Payment of corporation tax
November/December Year end tax planning
31 December Submission of corporation tax
return (12 months after the accounting period)Monthly
Events
Date Return
Monthly on 19th Payment of payroll taxes
(under certain circumstances - quarterly)
Quarterly Events
Date Return
14 April
14 July Forms CT61 to be submitted - tax
deducted/received
14 October on interest payments
14 January
5 July
5 October Form P46 (car) - notification
of change of car
5 January
5 April
Quarterly VAT returns (although these can
be monthly)
YANNONS CHARTERED ACCOUNTANTS have devised
an interactive screen-saver, the Financial
Date Monitor, which calculates all key dates
and deadlines applicable to your particular
circumstances. It works as a memory-jogger
by providing an on-screen reminder of the
dates in question for each of the seven
days leading up to the deadline. This is
available free of charge to all our clients.
Accounting
and Bookkeeping
Most operators of a new and growing business
have a flair for the environment in which
the business operates. They may be a great
salesperson, an outstanding mechanic, carpenter,
solicitor, or inventor. Unfortunately, most
people don't like to keep the books. As
an owner of a business you must remember
that your company's books and financial
statements represent a score sheet which
tells how you are progressing, as well as
an early warning system which lets you know
when and why the business may be going amiss.
Financial statements and the underlying
records will provide the basis for many
decisions made by outsiders such as banks,
landlords and trade creditors as well as
taxing authorities and other governing bodies.
The necessity for good, well-organised financial
records cannot be over-emphasised. One of
the greatest mistakes made by owners of
small businesses is not keeping good financial
records and making improper or poor business
decisions based on inadequate information.
Quality financial information does not
necessarily translate into complicated bookkeeping
or accounting systems. Far too often owners
of businesses become overwhelmed by their
accounting system to the point where it
is of no use to them. An accounting or book-keeping
system is like any tool used in your business;
it needs to be sophisticated enough to provide
the information you need to run your business
and simple enough for you to run it (or
supervise the book-keeper). Questions you
should ask in developing an accounting and
financial reporting system are:
1. Who will be the users of the financial
information?
2. What questions do I need answered to
manage the business?
3. What questions should be answered for
the Inland Revenue and Customs & Excise
authorities?
As your business grows, you should work
closely with your accountant to ensure that
your accounting system is providing you
with appropriate information.
Accounting
Records and Record-keeping
Another question that the owner of a business
must answer is "Who will keep the books
of the business?" Will you do it yourself,
will the receptionist or a secretary double
as a part-time bookkeeper, will you have
a bookkeeper that comes in periodically,
or will the volume of activity be such that
a full-time bookkeeper will be required?
Very often the owners of a business decide
to keep the books themselves and underestimate
the commitment they have made to other phases
of the operation and the time required to
maintain a good set of financial records
and books of account. As a consequence,
the record keeping is often low priority
and must be caught up later. This approach,
though rarely planned, can require a substantial
expenditure of time and money. While it
is important for the owners of a business
to maintain control and stay involved in
the financial operations of the enterprise,
this can be achieved by maintaining close
control over the cheque-signing function
and scrutinising certain records. Your company's
accountant can help develop a good programme
of record-keeping duties for you, your employees
and any outside book-keepers or accountants
you may engage.No matter what the size of
your enterprise, you should consider controlling
your business and safeguarding hard earned
assets as a priority from the outset.
Value
Added Tax
VAT is a tax on consumer expenditure and
is ultimately paid by the final customer.
Most business transactions involve the supply
of goods or services and VAT is payable
if they are made:
a) in the United Kingdom;
b) by a taxable person;
c) in the course or furtherance of business
and are not specifically exempted
or zero-rated.
VAT is collected by H M Customs & Excise
and is normally payable quarterly.
Registration
There are two different types of registration
- compulsory and voluntary:
A. Compulsory
A person who makes taxable supplies becomes
liable to be registered if:
a) At the end of any month, the value of
his taxable supplies in the period of one
year then ending has exceeded the registration
limit, which is £56,000 from 10 April
2003.
b) At any time, there are reasonable grounds
for believing that the value of his taxable
supplies in the next 30 days will exceed
the £56,000 limit.
c) If, where a business carried on by a
taxable person is transferred as a going
concern, the taxable supplies for the twelve
months prior to the transfer exceed £56,000.
In the most common situation, i.e. (a)
above, the person must notify Customs &
Excise of the liability within 30 days of
the end of the month in which the value
of the taxable supplies first exceeded £56,000.
If, for example, the value of the taxable
supplies first exceeded £56,000 in
the twelve months to 31 March, then Customs
& Excise must be notified by 30 April
and VAT registration would commence on 1
May.
B.Voluntary
In certain circumstances, it is possible
to register on a voluntary basis for VAT
even though the value of taxable supplies
may never exceed £56,000. This is
normally only beneficial where the majority
of supplies are being made to customers
who are themselves VAT registered, e.g.
it would not be beneficial for a domestic
painter with taxable supplies of £30,000
to be registered, whereas it would be beneficial
for a commercial or industrial painter with
the same level of supplies.
In summary, the advantages and disadvantages
of a voluntary registration are as follows:
Advantages
" enables input VAT suffered to be
reclaimed;
" a VAT number can give the impression
that a business is larger than it actually
is
" which sometimes can increase the
possibility of obtaining work.
Disadvantages
" the requirement to prepare VAT returns
on a quarterly basis and to submit them
within one month of the quarter end - is
the amount of work involved worth it for
the amount of input VAT that can be reclaimed?
" Customs & Excise will visit the
business about every five years to ensure
that VAT is being properly accounted for.
Taxable Persons and Supplies
a) Taxable Persons
It should always be remembered that it is
a person that is registered for VAT and
not a business. If a person has two separate
different businesses, both with taxable
supplies of £40,000, then that person
will be required to be registered for VAT
and account for VAT at the appropriate rate
on the total supplies of £80,000.b)
Taxable Supplies
Taxable supplies are all supplies made by
a business either to a third party or to
the trader himself (goods for own use),
which are not exempt supplies. Taxable supplies
therefore include zero-rated supplies.
The major categories of exempt supplies
are:
• Land (but not buildings)
• Insurance
• Postal services
• Betting, gaming and lotteries
• Finance
• Education
• Health and welfare
It is important that at the outset of a
business, a trader establishes the VAT status
of any supplies being made to avoid mistakes,
e.g. the services of a physiotherapist are
exempt, whilst the services of an acupuncturist
are standard rated.
Tax Rates
There are three rates of VAT:
- two standard rates -
17.5%
5% - for certain supplies of fuel and power
and sanitary goods
- zero-rated.
The four main areas of zero-rated goods
are:
a) Food and agriculture (but excluding pet
food and most catering);
b) Printed matter, including books and newspaper;
c) Young children's clothing and footwear;
d) Passenger transport (but excluding hire
cars, taxis and parking).
Any VAT charged by the business, whether
at 17.5% or 5% is known as output VAT and
the total charged or collected in the VAT
quarter is payable to Customs & Excise.
Input VAT
Input VAT is the VAT that you are charged
on your business purchases and expenses
(the other persons output VAT) and is normally
recoverable in full by a trader who only
makes standard rated or zero-rated supplies.
Businesses that make some exempt supplies
(known as partially exempt businesses) have
different recovery rules. The total input
VAT suffered in the quarter is deducted
from the output VAT charged or collected
and the difference is either the amount
of VAT due to Customs & Excise or the
amount repayable by Customs & Excise.
The majority of input VAT is recoverable
but there are special rules for:
cars;
• petrol supplied for private usage;
• business entertaining;
• goods sold under a VAT second-hand
scheme.
To reclaim VAT you have been charged as
input VAT, you must hold valid evidence
that you have received a taxable supply,
which normally means a valid VAT invoice
from a registered trader showing his VAT
number and the amount of VAT charged.
Special Events
VAT was originally described as a simple
tax but has gradually become more and more
complicated over the last twenty years with
changes to the operation of VAT every year.
It is not always possible to calculate each
quarter's VAT liability by merely deducting
input VAT incurred from 7/47 of the sales
income and professional advice needs to
be taken in the following situations:
• Importing and Exporting - either
within or outside the European Union;
• Partial Exemption, i.e. where a
business makes some exempt supplies, all
the input VAT incurred is not necessarily
recoverable;
• Retail Schemes, i.e. where both
zero rated and standard rated supplies are
made
which cannot be separately identified at
the point of sale;
• Land and Property;
• Cash Accounting;
• Self-supplies;
• Second-hand schemes for motor cars,
used boats, antiques, horses and ponies
and others.
Penalties
The impact of penalties has been considerably
reduced since the early 1990's and the possibility
of any business suffering a serious misdeclaration
penalty for an innocent error on their VAT
returns is low.The two most important penalties
still in existence which every business
should be aware of are:
a) Late registration penalty for not registering
for VAT at the correct time. The penalty
is based on a percentage of the VAT due
between the date of registration and the
date that the person was required to be
registered and the percentage increases
dependent upon the lateness of the registration.
The penalty is in addition to the VAT that
is due.
b) Default surcharge for traders that are
persistently late in either submitting VAT
returns and/or making payment of the liability
due. The penalty is based on a percentage
of the VAT due and is on a sliding scale.
VAT ChecklistRegistration
(a) Should the business be registered?
(b) Is basis of registration correct?
(c) Are details on registration certificate
correct?
(d) Do procedures exist for notifying Customs
and Excise of relevant changes?
(e) Review position at regular intervals.
Preparation of returns
(a) Has return been received? If not, then
obtain duplicate from VAT Office.
(b) Review sources of information.
(c) Prepare draft return.
(d) Check for accuracy and completeness.
(e) Make payment (if outputs exceed inputs)
Input Tax
(a) Do any restrictions on input tax exist?
- If "Yes", does an agreed method
exist?
- Does this method maximise input tax?
(b) Are invoice additions and calculations
checked?
(c) Is input tax claimed at the earliest
tax point?
(d) Are all claims properly supported?
- Ensure all supporting invoices kept.
Output Tax
(a) Are all income heads reflected for VAT
accounting?
(b) Are all potential sources of notional
supplies considered?
(c) Are all potential sources of income
(asset sales, etc.) covered
by VAT accounting system?
(d) Is VAT captured at the correct tax point?
(e) Is VAT correctly applied where appropriate?
Payroll
Taxes
Irrespective of the form of business in
which you operate, if you are going to have
employees then you will have to contend
with payroll taxes. The brief summary that
follows will give you some guidance in the
rules and regulations of the Inland Revenue.Helpful
publications
The Inland Revenue publish various booklets
relating to how PAYE is operated and the
legislation that you have to comply with.
Not only do you collect and remit PAYE to
the Collector of Taxes on behalf of the
Inland Revenue, you also operate the DSS's
sick pay scheme and maternity pay scheme
for the DSS. You should run the PAYE scheme
in accordance with the legislation and should
you fail to comply then the Revenue or DSS
will look to you for the tax or NIC you
failed to deduct. This can be costly if
you are unable to recover the tax and NIC
from the employee.
Do you have employees?
Whether an individual is an employee or
not in a particular situation is a question
of fact depending on the terms on which
he works. The question of whether an individual
is employed or self-employed is very important
for the business "employing" him
or her, as that business has to comply with
the reporting requirements.
In certain areas the Inland Revenue has
placed emphasis on reclassifying individuals
claiming to be self employed and has issued
leaflet IR56 entitled "Tax: employed
or self employed". This booklet sets
out the questions that should be answered
to determine the problem. If you have treated
someone as self employed and subsequently
after a routine visit from the DSS or Inland
Revenue it is clear that they were employees,
then the tax and NIC which should have been
paid will be assessed on you. Therefore
it is important to ensure when using the
services of self employed people, that they
are in fact self-employed.
If doubt exists as to the status of an
individual, the situation can be clarified
with the Inland Revenue.
The Operation of a PAYE Scheme
Upon registration the Inland Revenue will
send to you guidelines on operating PAYE,
National Insurance, Statutory Sick Pay and
Statutory Maternity Pay (employer's pack).
Included will be a number of forms with
which to operate the PAYE and NIC system.
You should familiarise yourself with and
have supplies of these forms, which are
as follows:
P11 Deduction working sheet
P46 Notification to the Inland Revenue where
no code has been notified to the employer
and application for coding
P46(Car) Notification of a car provided
for the private use of an employee or a
director
P45 Details of employee leaving
P14/P60 End of year return and employers
certificate
P35 Employer's annual statement
P38A Employer's supplementary return
P11D Expenses and benefits
P9D Expenses payments and income from which
tax cannot be deducted.
In order to calculate the amount of tax
and national insurance due by an employee,
the Inland Revenue will supply you with
sets of tables. By reference to the "tax
free" tables and an employees tax code
you will be able to calculate the amount
of salary that is not subject to tax. The
difference between this figure and the gross
amount is the employee's taxable pay. This
can then be calculated by reference to another
set of tables. The employer's and employee's
national insurance is calculated by reference
to the gross pay with a third set of tables.
Special rules exist for the calculation
of national insurance for directors.
The tax and national insurance should be
paid to the Inland Revenue by the 19th of
the month following that in which the salaries
were paid.
In most businesses, the directors, and
often the employees, have benefits that
are not immediately taxed through the PAYE
system, the most usual being the provision
of a car and possibly fuel. Class 1A national
insurance contributions are due on the taxable
value of these benefits in kind and are
due on the 19 July following the fiscal
year in which the benefits are made available.
In addition, the Inland Revenue requires
on an annual basis, a form P11D (Return
of expenses payments and benefits) for all
directors irrespective of income and all
employees receiving remuneration including
the benefit in excess of £8,500. For
those employees earning less than £8,500
but who receive expense payments and benefits,
a form P9D is required.
A form P46(Car) needs to be completed quarterly
to 5 July, 5 October, 5 January and 5 April
if any employees have been provided with
or have changed their company car. Further
details are given on the taxation of company
cars in Inland Revenue leaflets IR132 and
IR133. The Inland Revenue will still require
form P11D to be submitted annually in addition
to the P46 (car) forms.
Income
Tax and Corporation Tax
Eventually you will have to deal with income
or corporation taxes. The taxation legislation
is extensive and can be confusing for an
individual starting a business. This chapter
does not cover all the tax ramifications
of a new business, nor does it detail all
the expenses you can claim for, nor does
it give details of allowances available
on the purchase of some capital allowances.
A Chartered Accountant should be consulted
when you are dealing with the taxation affairs
of the business. The payment of taxation
has a direct impact on your cash flow.
Tax Returns
Companies
Companies are charged corporation tax at
the rate applicable during the financial
year (1 April - 31 March). Where a company's
accounts period spans two financial years
the profits for the period are apportioned
between the years.
Financial year to 31 March 2004
First £10,000 0%
Next £40,000 23.75%
Next £250,000 19%
Next £1,200,000 32.75%
Over £1,500,000 30%There are special
rules to calculate the tax rates applicable
for profits falling between the small companies
and normal rates, and are such as to ensure
that the tax charge rises progressively.
Corporation tax Pay and File was brought
into effect for accounting periods ending
after 30 September 1993. A company is required
to make an estimate of its own liability
to corporation tax and pay that liability
by the normal due date, nine months after
the end of the accounting period, without
an assessment being raised.
The company is required to send its completed
tax return (form CT600), accounts and tax
computation to the Inspector by the filing
date, which is 12 months after the end of
its accounting period. Penalties will be
charged if it is late.
Once the company agrees its liability with
the Inspector, there will be a settlement
of any balance due or overpaid. Interest
will be charged or paid from the normal
due date on the balance.
Personal tax
For the self -employed and those that pay
tax on other income such as rents, tax is
normally payable in three instalments -
the first two instalments are based on the
tax paid on the previous year's business
tax liability. Therefore half is paid by
the 31 January in the year of assessment,
the other half by the 31 July in the year
following the year of assessment. The third
instalment will be any balance due (payable
the following 31 January) or any amount
repayable by the Inland Revenue if your
final liability is lower than the amounts
paid on account.
Under self-assessment your income tax return,
which encompasses your trading results,
needs to be filed by 31 January following
the tax assessment year. This date is moved
forward to the end of September if you wish
the Inland Revenue to calculate your tax
liability.
Insurance
Business insurance, like many types of expenditures
is one of those items that business owners
typically do not like to pay. You must remember
that sufficient insurance can be as critical
to the success of your business as a good
product or service. Without proper insurance
you could lose all of the money, time and
effort you put into your company. The types
and amounts of coverage you purchase must
be evaluated on a cost-benefit basis like
any other commodity that you purchase. Your
accountant and insurance agent can help
you review the amount of coverage you may
wish to purchase for various purposes. Usually,
you will want to insure against risks that
could have significant detrimental impact
on your business. This normally would include
such items as fire, storm damage, theft,
general and product liability. Depending
on the nature and size of your business
it is often a good idea to self-insure for
all or a portion of certain losses. Self-insurance
can be accomplished by not buying coverage
for incidental risks or increasing the deductions
on policies that you do buy. Often, raising
the deductible can have a very favourable
impact on policy premiums. The administrative
cost to the insurance company to process
small claims is quite high, consequently
the rates typically go down substantially
if they are relieved of this expense by
insuring for losses in excess of a sizeable
deductible amount. An insurance broker can
provide you with comparative costs for various
types of coverage with varying degrees of
deductible amounts.
Required Policies
Very little insurance coverage is mandatory.
The only insurance coverage typically required
by law is public and employers liability.
Your insurance agent can explain the required
coverage, the rating systems, and help you
purchase a policy.
You must also be aware that the terms of
your building, office lease or mortgage
may require you to carry certain kinds of
insurance coverage in specified minimum
amounts. If you have leased equipment or
have borrowed money from a bank or other
lenders, there will usually be insurance
requirements in the agreements relating
to these transactions. There are many other
types of policies that you may wish to consider.
The specific coverage provided by each and
a qualified insurance broker can explain
the related costs in depth.
Some of the types of insurance coverage
that you might consider for your business
are listed below:
Commercial Liability Insurance
There are many types of liability your business
may need cover for. "Liability"
refers to your legal obligation to pay compensation
and costs awarded against you in respect
of loss or damage sustained by a third party.
Types of liability you may want to consider:
• Public Liability This will protect
you from any liabilities from a Third Party
(other than your employees) bodily injury
or damage to their property that may occur
during the normal operation of your business.
• Employer's Liability If you employ
anyone outside your immediate family, you
are required by law to purchase employer's
liability insurance. This insurance offers
you protection for any liability arising
from injury or illness sustained by employees
while they are working for you.
• Product Liability This will protect
you from any liabilities from a Third Party
(other than your employees) for bodily injury
or damage to their property that may occur
from products you sold or supplied.
Public Liability
Public Liability is used to protect businesses
in the event that they are sued by a member
of the public. Public liability insurance
is set into force to protect you if you
are sued by a member of the public claiming
that they have suffered a loss as a result
of negligence.
Key Man Insurance
Key man insurance allows you to cover key
members of your staff or management team
whose disability or death could cause harm
to your company.
Key man insurance is a type of insurance
which few medium and small companies have
in place, while many large companies have
key man insurance in place but only for
directors - i.e. the real key players in
the company have not been identified.
Landlord Insurance
If you rent your property to tenants then
you will need a specialist landlord's insurance.
As a landlord you face the risk of having
to fork out the costs in the event that
your property is damaged and you are not
insured.
Life Insurance
Life insurance can be a useful policy to
have for small business owners who are looking
for increased peace of mind over the security
of their family and business if they were
to die. Many large companies also offer
benefits packages which include life insurance
- the self employed need to be in a position
to negotiate their own cover and a life
insurance policy should be one of these
insurance types.
Product Liability
Product Liability covers you if any products
that you sell or provide are faulty or defective.
In the event that you provide a product
and it is defective and someone suffers
a loss as a result of that product, they
are entitled to pursue you for compensation.
For example, if you supply a television
and it blows up causing damage to someone's
property they will be entitled by law to
sue you for compensation.
Products, Sales and Servicing Indemnity
(PSSI)
Products, Sales and Servicing Indemnity
is a packaged cover that is usually provided
with employer's liability and public liability
insurance. PSSI consists of three different
covers:
Products Indemnity will cover you in the
event that you are pursued for selling defective
goods.
Sales Indemnity has the same purpose as
products liability but it kicks into effect
with second hand goods and ones which fall
outside the manufacturer's warranty; it
is usually associated with used car dealers
Servicing Indemnity will cover you in the
event that you are pursued for defective
workmanship. For example if you were a car
mechanic and forgot to re-attach the brakes
properly and the client had an accident
as a result of the brakes not working.Business
Interruption
This coverage, as the name implies, covers
the loss of revenues your business would
generate if you were forced to shut down
for reasons beyond your control. While this
is obviously valuable insurance, the policy
premium must be carefully considered relative
to the potential profits your business might
lose during a short shutdown of operations.Employee
Fidelity Bond
This type of insurance typically covers
the risk of loss from theft by employees.
If your business deals in large amounts
of cash, negotiable securities, or similar
types of assets, you may be well advised
to consider this coverage. Certain industries
are required to carry this insurance by
Regulatory Authorities.Umbrella Coverage
This type of insurance covers losses above
and beyond the limits of other policies
that you carry. Umbrella policies usually
pertain to liability of various sorts and
are usually valuable if your business, or
you, has a net worth that requires protection
in the event of a catastrophic loss.Insurance
is like any other product that you purchase.
Before purchasing it you should consult
with more than one broker as to your needs
for protection. You should discuss insurance
needs with acquaintances in the same or
related business as yours. Before buying
coverage you should check out the reputation
of the company that is underwriting the
policy.
Selecting
professional advisers
Starting your own business obviously entails
a multitude of decisions; decisions which
can seem overwhelming without the right
players on your team. In order to succeed
you need to equip yourself with every tool
at your disposal.One of the most cost effective
tools you can utilise is the expertise of
a specialist. The right accountant and solicitor
can eliminate a host of problems and potentially
costly errors you might make as you build
the financial foundation of your successful
business.As any coach can tell you, having
a first rate quarterback (you) won't guarantee
a winning team without a first rate line
of defence. The right accountant and solicitor
is your best defence. Their expertise can
help save you money that in turn can be
used to increase profits.When enlisting
the expertise of an accountant and solicitor
you want a specialist suited to meet your
specific needs. You want a specialist who
will listen to you. More importantly, you
need some you can and will listen to as
they devise strategies to help you succeed.You
want to succeed - and you can. By taking
the time to make key decisions and enlisting
the right players on your team - you will
succeed!We wish you success and welcome
you to the wonderful world of free enterprise.
Useful
names, addresses and telephone numbers
INLAND REVENUE
Self Assessment Orderline 0845 9000 404
Self Assessment Helpline 0845 9000 444
New Employer's Helpline 0845 607 0143
Subcontractors Helpline 0845 300 0581
Helpline for the Newly Self-Employed 08459
15 45 15
Working Families Tax Credit 08457 143143
NATIONAL INSURANCE
National Insurance Contributions Office
Longbenton, Newcastle upon Tyne NE98 1ZZ
CUSTOMS & EXCISE
National Advice Centre 0845 010 9000
MISCELLANEOUS
Companies House Crown Way, Maindy, Cardiff
CF14 3UZ 029 2038 0801
Name Address
Sundry Internet Sites:
Inland Revenue - publications/forms www.inlandrevenue.gov.uk
NIC - Information www.inlandrevenue.gov.uk/nic/index.htm
H M Customs & Excise - Information www.hmce.gov.uk
Companies House - information/forms www.companieshouse.gov.uk
Government - Central Office of Information
www.nds.coi.gov.uk
Parliament www.parliament.the-stationery-office.co.uk
News providers - BBC www.bbc.co.uk
Institute of Chartered Accountants in England
and Wales www.icaew.co.uk
Association of Certified Accountants www.acca.org.uk
Business Network International (BNI) www.bni-europe.com
BT PhoneNetUK (UK online directory) www.bt.com/phonenetuk
Yellow Pages www.yell.com
Thompsons Directories www.infospace.com/uk.thomw
Royal Mail (Postcodes on line) www.royalmail.co.uk/paf.home.htm
UK Street Map www.streetmap.co.uk
Conclusion
Always remember to seek professional advice
in areas that you are not sure. The benefit
will far outweigh the cost. Good luck!
For information of users:
This guide is published for information
only. It provides only an overview of the
regulations in force at the date of publication,
and no action should be taken without consulting
the detailed legislation or seeking professional
advice from this firm. No responsibility
for loss occasioned by any person acting
or refraining from action as a result of
the material contained in this guide can
be accepted by the firm.
|
