Other Matters
Pensions
It is sensible to provide for your retirement whilst generating income through the business. The sooner you start the less you will need to contribute each month for the same return. If you take a low salary this may affect the amount of premiums you can pay tax effectively under a pension plan. You should seek our tax advice relating to your specific circumstances before affecting any pensions.
Insurance
Consider obtaining permanent health and/or critical illness insurance to provide income if /when you are unable to work due to illness. You should also consider professional indemnity insurance and public liability insurance. Employee liability insurance is required by law and we can help you obtain this.
Corporation Tax
Corporation Tax is payable on the profits of the company. Profits are the difference between income from work done less allowable expenses. We calculate the tax due and advise you of the amount and due date. If liable to IR35, most of your income will be paid as salary and expenses, and the Corporation Tax liability will be negligible, if any at all.
VAT
The company is required to register for VAT when its turnover reaches the VAT threshold in any rolling twelve-month period. Until then the company need not register but can do so voluntarily if it chooses. The main reason for registering is to reclaim the VAT on costs incurred.
If registered, the company has to charge VAT from the date shown on the registration certificate. You may have applied for registration from the first day of trading but the certificate is not received until two/three weeks later. In this case advise the agency accordingly and mark the invoices ‘ VAT registration applied for; invoice for VAT element to follow upon receipt of registration certificate’.
VAT can only be reclaimed on costs from the date of registration except in start up cases where VAT on pre-trading costs are allowable. Invoices should be addressed to the company except pre-trading costs where this will not usually be possible.
