If I’m a member of the public, how do I get access to wholesalers and cash and carry?
You can’t in most cases; you have to be a licenced company! Many wholesalers are unconcerned about whether you are a sole trader or a limited company, but they will need evidence of some kind, such as bank accounts, bills in the business name, and trade references. Checkout Metropolitan Income Tax and Book Keeping.
What are my choices for starting a company and how do I go about doing so?
The two most common ways to start a business are as a sole trader (i.e. self-employed) or as a Limited Company.
• INDIVIDUAL TRADER
If you wish to work as a sole trader, you must notify HMRC (the taxman!) within three months of beginning your company.
If you are self-employed, you must file your Self Assessment Tax Return by the 31st of January each year. While most people are comfortable doing this themselves, you should be able to find an accountant to assist you. If you keep good records, their fees won’t be too high!
If you plan to work for yourself, you should consider creating a trading name and opening a separate bank account under that name. Not only would doing your accounts at the end of the year be much smoother but all of your business transactions will have gone through one account and your personal transactions will have gone through another. However, several wholesalers and cash and carry establishments would need evidence of your business status, and a business bank account is a good way to do so!!
If you run your business from home, you can consider getting a phone line in the name of the company, whether it’s a landline or a cell phone, as these bills can be used to show you’re open for business.
• LIMITED LIABILITY COMPANY
The process of forming a Limited Company is relatively simple. There are hundreds of websites where you can do this online in a matter of hours. For example, at companiesmadesimple.com, you can form a company for just 16.99! You can appoint anybody you like as directors and shareholders when establishing the company, but keep in mind that the directors are legally obligated to file all required paperwork during the year, and the shareholders are the people who can benefit at the end of the year! Of course, you can simply establish yourself as the sole director and shareholder!
You will obtain your Company Number and a certificate once your company has been established. You’ll need a business bank account in this name after that!
You must file an Annual Return once a year, which can be done online for $15 and is essentially a list of who the directors and shareholders are. If these specifics do not change from year to year, this will take you about 5 minutes to complete by the second year! But be warned: if you don’t complete it in a timely manner, you might be fined!
Every year, you’ll need to prepare proper reports, which will be filed with Companies House and sent to HMRC with the Corporation Tax Return. I highly encourage you to hire an accountant to do this for you because you know what you’re doing!! There are a lot of very strict guidelines on how the accounts should look, and I wouldn’t be able to help you with this on here! Asking for advice is the easiest way to locate an accountant. If at all possible, stay away from the big firms; they’ll only charge you an exorbitant fee and you won’t be considered as valuable if you’re a small business! Contacting your nearest BNI – a business networking community – is another good way to find an accountant. Most chapters would have an accountant on board, and they should have excellent references!
However, keeping good records is one way to keep your accountant fees down!!
What is the best way to keep track of my accounting records?
You may be able to keep your records in a simple spreadsheet if you run a small company. It could be as easy as keeping one sheet for sales and another for expenses!
If you do think you’d benefit from a more comprehensive accounting scheme, I’d suggest Sage. Depending on the size of the company and how much work you want the software to do for you, you will purchase different packages. There are other accounting programmes available, but you’ll have to do some research online to find out what people suggest!