Company Formation : Next Steps
Posted: Mon 7 April, 2008 | Author: Lyle | Filed under: Domestic, Own Business, Work-related |6 Comments »Today, we’re seeing the accountant again about the company formation, and all the accountancys and Inland Revenue requirements. It’s taken us some time to get to this, mainly through the joys of trying to co-ordinate my work and diary, Herself’s work and diary, and the accountant’s diary. So today’s the day.
In the meantime, the company has been fully formed, registered, and generally sorted. I’ve done the initial Inland Revenue registrations – I’m not going to bother with VAT registration at the moment, as I don’t really need it, although I may think about it later in the financial year as it does add a certain level of respectability to the company. We’ll see.
Once this is done, it’s just sorting out the business bank account – and that’s lined up to be done two weeks today, once the current contract has finished.
We’re getting there.
VAT is worth doing if all or the majority of your customers are VAT registered, as it makes no difference to them if you charge VAT and you then get the benefit of reclaiming VAT on your purchases especially usuefull for computer equip upgrades and accountants fees !!
Very true – I’m still thinking about the entire VAT registration thing, and I’m sure it’ll happen at some point.
It’d just be nice to reduce the paperwork levels a bit…
Mmmn… you need to base your decision on whether it saves you money rather than just ditch it because of the paperwork. Afterall running your own company is full of paperwork. You can back date some vat paid prior to registration, generally speaking that’s 3 years on costs incured to set up the business, but only 6 months on services such as accountants fees.
Re: VAT. Three words: Flat rate scheme. Three more words: money for nothing.
Do it.
Agreed, re basing the decision on money-saving rather than paperwork-reduction. I was being a bit flippant.
Anyway – at the moment I’m not making any capital purchases (although I’ll need to at some point this year) and as you say, I can claim the VAT back on those for up to three years, although it’s only three months on services. (According to the discussion yesterday, anyway)
So I’m still thinking about it – yes, it’ll save me money in the long run, but right now I’m not spending out the money so I don’t really need to be claiming it back.
And Tom, I’ll look at the Flat rate scheme – that’s not one I’d come across so far, so thanks!
Flat rate scheme won’t work well for you as (like me) you are mostly only a service (rather than goods) provider… you charge customers VAT at 17.5%, pay HMRC at an agreed rate (eg 13%) but then can’t claim any VAT back.
I’d avoid becoming VAT registered unless your turnover means you have to. You will lose small customers who won’t want to pay job cost plus VAT. But, I only have 11 years experience and am not an acocuntant as you know…