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  • Writer's pictureIrina Inayat

Essential Guide for New Businesses in the UK

Accountancy and Regulatory Requirements

We often work together with new businesses and to avoid headache, loss of important resources like time and money, and so we have put together this small guide to help all new business owners navigate the accountancy and regulatory requirements. Here is our summary of what a new business or startup needs to know about accountancy and the regulatory side in the UK to guide you.


Business Structure

Understand the different business structures available in the United Kingdom, such as sole trader, partnership, limited liability partnership (LLP), and limited company (LTD). Choose the structure that best suits your business needs and consider factors like liability, tax implications, and regulatory requirements.


Registration and Compliance

Register your business with the appropriate authorities, such as HM Revenue & Customs (HMRC) for tax purposes and Companies House if you're forming an LLP or a limited company. Ensure compliance with regulations related to VAT registration, payroll taxes, and other statutory obligations.


Accounting Systems

Set up robust accounting systems to track income, expenses, and financial transactions. Collect all the receipts, and we mean it: every single one. Consider using accounting software or hiring an accountant to manage your books effectively. Keep accurate records to facilitate tax compliance and financial reporting and mitigate tax as far as is possible.


Taxation

Understand your tax obligations as a business owner, including corporation tax for limited companies, income tax for sole traders and partners, and VAT if your business is VAT registered. Get familiar with tax deadlines, allowances, reliefs, and deductions to optimise your tax position and minimise liabilities.


Financial Reporting

Prepare and file annual financial statements in accordance with UK accounting standards and Companies Act requirements. Ensure compliance with reporting deadlines and disclosure requirements to provide stakeholders with accurate and transparent financial information.


Employment Regulations

If you plan to hire employees, be aware of employment regulations governing recruitment, contracts, wages, and employee rights. Comply with health and safety regulations, workplace pensions, and other employment-related obligations to maintain a compliant and ethical workplace.


Data Protection

Protect sensitive data and comply with data protection laws, such as the UK General Data Protection Regulation (UK GDPR), when handling customer information, employee records, and other personal data. Implement data security measures and obtain consent for data processing activities to avoid penalties for non-compliance. Appoint a data protection officer (DPO) if handling sensitive data and ensure that you register with the Information Commissioners Office (the ICO).


Business Insurance

Consider obtaining business insurance to protect against risks such as liability, property damage, professional indemnity, and cyber threats. Assess your insurance needs based on the nature of your business and industry-specific risks to safeguard your assets and operations.


Have a Plan B

It is crucial for new businesses to consider contingency planning. This includes preparing for unforeseen significant events such as the death of a key stakeholder or other unexpected disruptions. What will happen to your business when the unthinkable happens?


Key Person Insurance

If the unthinkable does happen, you can have key person insurance that pays out a lump sum in the event that a key employee is lost to the business permanently or temporarily. If you plan properly these can be a cost to the business as a business expense such as relevant life insurance.


Cross Option Agreements

Again, if you wish to protect yourself if a partner or fellow director is unable to continue to work in the business, you need to consider what options you put in place so that you can be offered the share of the partnership or the shares of a limited company first before, say, a family member is given those shares so that you can effectively continue to trade.


Professional Advice

Seek guidance from qualified professionals, such as accountants, lawyers, and business advisors, to navigate the complex regulatory requirements and ensure compliance with relevant laws and regulations. Invest in professional advice to mitigate risks, optimise financial management, and support long-term business success.


Only by understanding and addressing accountancy and regulatory considerations from the outset, new businesses and startups can establish a solid foundation for growth, compliance, and sustainability, saving themselves from unnecessary headache and wasted time and money.


Penn Group was created by design, specifically to assist you to manage ALL the above mentioned issues within our own Group of companies, which comprise an SRA regulated firm of Solicitors, FCA regulated financial advisors as well as Penn Accounts which can manage all your accountancy needs and Penn Services that can assist you with obtaining commercial funding. 


Irina Inayat



0207 183 6623 

 

The information provided in this article is not intended to constitute professional advice and you should take full and comprehensive legal, accountancy or financial advice as appropriate on your individual circumstances by a fully qualified Solicitor, Accountant or Financial Advisor/Mortgage Broker before you embark on any course of action. 

 

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