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What are the Benefits of Setting Up My Own Business?

14 - 03 - 2017

Are you someone who has a business idea bursting to escape but the thought of starting your own business is too overwhelming? You’ve heard all the negative comments and are wondering why people are still attracted to starting up new businesses.

 

Our Sales Advisor, Charlotte, explores some of the benefits experienced by Foremans clients when setting up their own business. 

One of the main reasons individuals approach Foremans for assistance with setting up their own business, as a Limited Company or Sole Trader, is increased income. Your customer/client will usually pay more to an independent contractor than to an employee, because they save the costs incurred by employing someone, with the advantage of a flexible skilled workforce.

  

Another favourite reason is tax-efficiency. Setting up your own business means the opportunity to make the most of your business income, such as tax free expenses and taking dividends from your Limited Company. You can also pay yourself a tax-efficient salary to ensure that you remain in the National Insurance system and are deemed to be making contributions. A good accountant should be able to tell you the many other ways that you can maximise your income.

 

Being your own boss and being in control of your own company is another great perk to owning your own business. You not only decide the hours and days you work, but also what projects you work on and how.

 

Our clients comment on their work/life balance often and enjoy the opportunity to be flexible in their work. You decide when and how you work. You will negotiate the contract for use of your services with your client. This flexibility allows you to organise your work around other equally important commitments. You are in control of your work/life balance meaning you get to spend more time with family and friends or take up a new hobby!

 

You will also be able to increase your marketability, as you increase your skills and vary the types of contract you undertake so your CV will become more marketable. Changing roles with a variety of businesses will help to improve your skillset and your expertise within your chosen industry. You can also choose to complete relevant training, which can be a tax-allowable business expense.

 

Foremans LLP offer a full administration, bookkeeping and accountancy service to allow our clients to concentrate on providing specialist skills while we look after their business – all for a set fee so they can budget their costs.

 

Interested? Call for a free, no-obligation chat through your ideas for your new business.

 

01244 625 500 or email ContactUs@foremansllp.com

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01244 625 500

Fixed Data

Assumptions

General                                                                                                                              

• The user is over 21 and subject to tax in the UK
• The user wishes to minimise their tax liability
• The user is subject to national insurance i.e.he/she is not over retirement age
• Only current tax rates and limits are applied
• No tax mitigation payments are made e.g. pension contributions
• Only 3 digit letter 'L' tax codes shown in the drop down list can be entered 
• The user does not have a turnover greater than £100,000 where fewer reliefs and or higher taxes may apply

Expenses

• All miles claimed as expenses are for business use using a personally owned car or van
• All other expenses claimed are wholly, necessarily and where appropriate exclusively for the benefit of the business

Foremans LLP Charges

• Foremans fees associated with Limited Company, Sole Trader or Umbrella are as per published rates
• Foremans current Service Costs are allowed for in all calculations.

Holiday Pay

• Holiday pay is accumulated week by week by Umbrella or Agency employer but paid out during the year

VAT

• Limited Company or Sole Trader will be VAT registered
• Limited Company or Sole Trader will take advantage of Flat rate VAT
• Flat rate applied includes the benefit of the additional 1% applicable to the first year of VAT registration

Limited Company Conditions

• One director / one shareholder in a Personal Service Company
• Director of Personal Service Company elects to vote for 100% dividend after salary, costs and expenses
• Director's salary is maximum salary to the primary threshold for NI
• The Limited Company is trading normally i.e it is not subject to IR35 and is not a Managed Service Company

NOTES

• The Current tax rates are taken from the Fixed Data Table
• The current Value Added Tax Rate is 20% and is applied to all invoices and expenses as appropriate
• The Director's Salary is fixed in relation to National Insurance thresholds. Higher Rate Taxpayers should consider the advantages and disadvantages of a larger annual salary or bonus
• Higher Rate Taxpayers may wish to consider the advantages and disadvantages of shared ownership of their business
• Users with a tax code other than three digits and letter "L" may telephone or email our Development Department to request a detailed calculation
• Generally the use of an Umbrella rather than an Agency payroll is only efficient if sufficient weekly expenses are allowable and claimed
• The expenses claimed under an Umbrella should not prevent the proper operation of National Minimum Wage