Basic Business Law
As a small business owner it's your responsibility to ensure your business is operating on the right side of the law. Below is an overview of the main areas of legislation that all small businesses should be aware of.
Business Type
The first thing you must do choose your business format. You have basically three choices: sole trader, partnership or limited company. The format you choose will have an impact on the taxes your business pays, and also the regulations that apply to your business.If you're not sure if you need to register as a self-employed person, take a look at the leaflet IR56 from HM Customs and Revenue (HMRC). If you're still not sure, then call the Revenue helpline on: 08459 15 45 15. Do this as soon as you start trading or you'll get a fine of £100 if you haven't registered within three months of starting your self-employment.
Health and Safety
No matter what type of business you run, you must ensure that you comply with all the health and safety regulations that apply to your business type. Many of these regulations will relate to your premises, but even people working from home who are still your employees must be assessed for any dangers. The Health and Safety Executive (HSE) have overall responsibility in this area. You can read introductory information on their website at: www.hse.gov.uk/business/getting-started.htm. You can also download the HSE's introduction to health and safety also from their website at: www.hse.gov.uk/pubns/indg259.pdf. Also available from the HSE bookshop [www.hsebooks.co.uk] is the Essential of Health and Safety at Work that is well worth a read.Tax, National Insurance and VAT
The type of business you are running, or intend to start has a large bearing on how much tax you have to pay. HMRC have some basic advice on their website you can access at: www.hmrc.gov.uk/startingup/taxgate.htm.If you are not going to trade as a sole trader, but intend to start a limited company or a partnership, your tax affairs are a little more complicated. You will also have to pay Corporation Tax. You can read 'A General Guide to Corporation Tax Self Assessment' at: www.hmrc.gov.uk/pdfs/ctsabk4.pdf. This explains all your need to know.
And if you intend to employ people you also have to ensure you comply with all the employment law that exists. You should download the employer's starter pack from the HMRC website: www.hmrc.gov.uk/employers/starter_pack.htm.
If your business will supply goods or services amounting to more than £60,000 in any 12 month period you will have to register and pay VAT. If you're unsure if you need to register, read 'Should I Be Registered for VAT?' at: http://tinyurl.com/kkwwk.