Setting up as a self-employed sole trader is the simplest and quickest way to start a one-person business. This is our most popular package with UK residents, who has a valid permission to live and work in the United Kingdom, and includes:
An initial consultation on registration as a self employed;
A practical advice and guidance to help you get your business off the ground;
Our legal and initiation fee for registration is included in the price of this package;
The registration of your self as self employed in 2-3 weeks;
The preparation and submission of the appropriate forms to Inland Revenue to obtain National Insurance Number and PAYE registration (extra fees for using these services will apply);
The provision of specialised account books, seals and other stationeries (extra fees for using these services will apply);
The registration for VAT if you expect to have turnover of more than £73,000 a year (extra fee for using this service will apply).
Please note: if you run a business from home, you may have to pay business rates for the part of your home that you use for your business. Please contact us for further details.
Incorporate as a Company
£ 32.00
No Annual Charges
This is our most popular package with UK residents, and includes: -
The registration of your company from scratch using your own registered office address, and appoint your own candidates to the roles of director, secretary (if needed), and shareholder;
The standard capital on formation is £1.00, this is divided into 1.00 ordinary share valued at £1.00 (a minimum of one share must be issued);
The formation of a limited company usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for incorporation is included in the price of this package;
The following documents, which need to be printed and signed, will be emailed to you upon formation of your company: -
A certificate of incorporation (requires PDF file reader);
The memorandum & articles of association (requires MS-Word file reader);
The first meeting of the board of directors (requires MS-Word file reader);
Share certificates and a company register (requires MS-Word file reader).
Register as an LLP
£ 125.00
No Annual Charges
This is our most popular package with UK residents, and includes: -
The registration of your LLP from scratch using your own registered office address, and appoint your own candidates to the roles of members and designated members;
The standard capital on formation is £1,000, this is divided into 1,000 membership certificates valued at £1.00 each (it is not required to have all of the certificates issued, but a minimum of two certificates must be issued);
The formation of a limited liability partnership usually takes as little as four to six hours from the time that your application and payment are received by Coddan;
The government fee for LLP incorporation is included in the price of this package;
The following documents, which need to be printed and signed, will be emailed to you upon incorporation of your LLP: -
A certificate of registration (requires PDF file reader);
The partnership agreement (requires MS-Word file reader);
The first meeting of the board of members (requires MS-Word file reader);
Membership certificates and an LLP register.
Business Start-Up: Self Employed
When you start working for yourself, you will need to register as self-employed with the Inland Revenue.
Once you are registered as self-employed, you will be a self assessment taxpayer.
You can trade under your own name, e.g. John Doe, or use another business name, e.g. AAA Business Marketing (don't forget to check that no-one else is using the name).
If you are self-employed, you are responsible for paying your own tax and national insurance contributions.
You will need to keep business records and details of your income so you can fill in an annual tax return.
If your business turnover is more than the VAT threshold (£73,000) you will normally have to register for VAT.
You pay Class 2 National Insurance contributions at a flat rate of £2.50 a week. However, if your earnings are below £5,315 per year (2011-12) you might not need to pay.
Yhe amount of Class 4 National Insurance contributions you have to pay for any tax year is based on your profits for that year. You pay 9 per cent on annual profits between £7,225 and £42,475 (2011-12) and 2 per cent on any profit over that amount.
Bear in mind that Class 2 NICs do not count towards the additional state pension, statutory sick pay or jobseeker's allowance.
With some types of business, you need to get a licence before you can start working.
Key dates for self-employed tax: -
30 September: sending in your paper tax return if you want HMRC to work out how much tax you owe.
31 January: sending in your tax return to avoid a penalty.
31 January and the following 31 July: tax payments.
Business Start-Up: Private Company
A private company limited by shares in England and Wales must have at least one director, one shareholder, and may have a secretary.
You need at least one person to form this type of company. If there is only one director, and that director is a natural person in your company, that director can also act as the secretary.
A company must have at least one director who is a natural person. This requirement is met if the office of director is held by a natural person as a corporation sole or otherwise by virtue of an office.
You can register a sole director' company, if you are familiar with the secretaries duties and responsibilities, because all of them belongs to a sole director.
The directors and secretary of your company can also be shareholders.
The Companies Act imposes no restriction on the minimum age of company directors. However Companies House will actively discourage the appointment of anyone under the age of 16 from taking up a company directorship on the grounds that the individuals concerned may not fully understand the legal liabilities that go with the position and for the most part will not have the experience necessary to perform the duties of a company director.
Under the Companies Act 2006, there is no restriction on any or all of the members/shareholders being from an overseas country (i.e. outside the United Kingdom in terms of residency, domicile, citizenship, place of incorporation or all or any of those concepts).
There is no requirement for the officers of your company to be UK citizens or residents, nor for them to hold valid work permits.
Owning, or being an officer of a UK company does not, however, grant you any right to live or work in the UK if you are a foreign national.
Your company must have a registered office address within England or Wales; this is the official address of your company and will be on the public record as such.
Your company must hold its official company documents at its registered office address: its register of shareholders, and its constitutional documents.
So long as you maintain a registered office address in England or Wales, you can conduct your business from any place in the world: you do not have to run your business from your registered office address.
ONLINE LIMITED COMPANY REGISTRATION - GUIDE & ADVICE ON STARTING A BUSINESS: START-UP A FAMILY BUSINESS, START-UP YOUR HOME-BASED BUSINESS WITH THE UK BUSINESS INCORPORATION AGENT
Every year thousands of people, fired with the entrepreneurial spirit, decide to take the plunge and start their own small business. They come from all backgrounds and ages. Their businesses are based on every conceivable idea from gardening and IT to child minding, consultancy and arts and crafts. The buzz of being your own boss has few equals. While many of these businesses succeed, sadly some fail within a short time of starting, usually due to a lack of proper preparation and planning. If only they had been able to get some quality help and new business advice.
Why should you bother with the looking of useful information that might help you to stat up you business. Leave it to the professionals. So, if you thinking about starting your own business, or already started one, but looking to get some professional advise, why do not you ask Coddan for a help? Coddan will be glad to provide you initial free ideas about how to form your business. All that you need to do is just to send us your e-mail enquiry to: consultations@ukincorp.co.uk and you will receive an answer from our business consultants within 24 hours absolutely free and confidential.
Our firm has been establishing to provide the practical guidance and qualified assistance in starting and running a limited liability business within United Kingdom and offshore jurisdictions (BVI, Cyprus, Belize, Isle of Man IOM, Gibraltar, Mauritius, Guernsey, Jersey, Nevis, Panama, Hong Kong, etc.). Our web site summarises the procedures and costs associated with setting up a private limited company or register a public limited company in the United Kingdom, and international company formation in other offshore countries. We advise you on the most appropriate business legal entities formation & LLC incorporation to suit your individual or business circumstances, so that you do not need to spend your cost-effective time to research how-to register a company or guess with the different business registration options. We have years of companies formation experience behind us and we have established well respected name and reputation in starting a business.
Self Employment vs LTD
As many know, employees have rights on how many hours a week they must work on average. Most employees do not work more than forty-eight hours a week and receive overtime pay for additional hours put in. When self-employed, however, these rules do not apply. A self-employed person could work seventy hours a week, if that is what is needed, and would get paid no overtime or nothing else additional. Because they work for themselves, their wages depend on what they bring in. Another responsibility that is given to the self-employed is taxing their income. A self-employed person must allot for his or her own tax payments and follow the guidelines set by the government. Normal employees depend on their employers to do this task for them and are not required to worry about this. Being a LTD company also protects your personal assets should you business get into financial difficulty. If you're starting out a capital is restricted and you expect to earn under ?20,000 then it may worth sticking to being self employed and then move over to being a LTD company when have more money available to you. Typically self employed people get a bad deal with getting competitive mortgages. The reasons why are obvious; to the lender they are a risk, an unknown quantity. Find out the links below on the pros and cons of registering your business.
Coddan is one of the leading service incorporation agents in the field of English, Scottish, and Irish companies formation and registration. We can help you in starting a business in England & Wales Scotland, Northern Ireland and Republic of Ireland. Over 95% of our companies are incorporated within 4-6 hours. The electronic submission of information enables a fast company creation satisfying all of the required legal formalities: a director, a secretary, a registered office address and shareholders. Our electronic filing software has been approved by Companies House. Companies House (Companies Registry, Secretary of State) is an executive agency of the United Kingdom Government Department of Trade and Industry (DTI). All limited companies in Great Britain are registered with Companies House and file specific details as required by the Companies Act 2006.
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Allow us to help you to establish a company and get it running; or to select the best type of businesses for incorporation, and register your general trading company, branch, place of business, joint-venture, subsidiary or a holding company in the UK or offshore country. We may assist to register a right to manage, flat property management, intellectual property management, ship management, or charitable companies, clubs, or trusts. Before to register a company online, you should conduct a company name search - our new company name search tool will help you check that the company name or trade mark you are thinking of using for your business is not already registered or similar to one already existing. Our company name checker directly searches the Companies House database and checks the index of all UK live companies and those dissolved within the last 12 months.
If you will require further information about your business needs, pre-start stage and continues you can book an appointment with our business consultants in our office. It will be a bespoke service entirely for your benefit. You can discuss anything that concerns you and ask for advice on any aspect of starting and running a new business. At any stage of your business activity, you can ask to speak with our specialists about specific questions which disturb your mind as a head of the business, such as bookkeeping, taxation or marketing for help to start your own business. All business advice meetings are on an appointment basis.
These meetings are usually taken between an hour and an hour and a half, but we can spend additional time, if it required for your business needs. We confirm your meetings, both by telephone and in writing and we suggest how you can prepare for the meetings so you can obtain the maximum benefit from them. We also will require receiving from you the list of questions that you intend to discuss with our specialist, so we could be fully prepared for your meeting.
Coddan advise executives, full boards, board committees, non-executive directors, in-house counsel and institutional investors. Our advice covers a wide variety of matters including:-
Board level structures and processes;
Board composition;
Corporate social responsibility;
Defamation risk;
Directors' fiduciary duties;
Due diligence;
Governance-related disclosure requirements;
Insurance;
Internal investigations;
Investor relations;
IP protection and management;
New competition law;
Non-executive director recruitment;
Remuneration and incentive schemes;
Share options;
Review of annual report and accounts.
At Coddan, business specialists and consultants also can assist with the following queries and matters: -
Acquisitions and disposals of businesses including management buy-outs and buy-ins;
Intellectual property - we advise on exploitation and/or realisation of intellectual property including patents, trade marks, copyright and industrial know how in conjunction with the firm's intellectual property group; we also advise on confidentiality issues, restrictive covenants and computer software and hardware licensing;
Commercial agreements including agency, distribution and management agreements;
Shareholders agreements - we have the expertise and knowledge of many industries to recognise what our clients require;
Internet start-ups, web-site design and development;
Financial services regulations;
Company incorporations for both local and foreign interests - we offer a fast, efficient and tailored fixed fee service for company incorporations;
If you would like a personal face-to-face consultation and dedicated help with your business start-up, call us on +44 (0) 207.935.5171, or 0330.808.0089 to discuss your requirements and make an appointment with one of our consultants. A consultant will contact you at a pre-arranged appointment time to discuss your individual circumstances, as well as your suggestions in relation to your incorporation needs.
Initial contact and dialogue may be by e-mail. At some point in the dialog, it may be decided that telephone or office consultation will be beneficial. To apply for a consultation, please complete an online questionnaire below, we will then arrange a private consultation with one of our consultants. An initial consultation with a private consultant costs between £45.00 and £100.00, please note that our senior advisors charge £150.00 per hour.
If an applicant subsequently joins the tailor-made premier service, the cost of the consultation is included in the price of the package. If you prefer not to complete our online questionnaire, you can submit your inquiry by e-mail to consultations@ukincorp.co.uk, with the subject: "Online Inquiry" or by post: Attn: Coddan CPM LTD, Corporate Division, 124 Baker Street, London, W1U 6TY, or by fax: + 44 (0) 207.681.3318. Upon receiving the information, you will be contacted by one of the business consultant to discuss your situation.
What Kind of Business Should I Be?
There are four principal legal forms that a film production or distribution company might take: -
Sole Trader (Self-Employed): The simplest structure, but carrying unlimited liability for the owner. Most people who start in business do so as sole traders. They work on their own. They alone receive the income and are liable for any debts. However, with that comes danger. You're totally liable for any debts that you incur, because the business is, quite simply, you. The financial costs of starting up are minimised by working alone from home. It can be a lonely life but, instead of colleagues, you have customers.
Limited Partnership: Relatively simple but inflexible. Limited partnerships they are very rare today and account for less than 1.2% of all partnerships in the UK. A limited partnership is formed when one or more of the partners invest capital into the business but do not participate in running and managing the business. These partners therefore have limited liability as they can only lose the amount of money that they initially invested into the business.
Limited Liability Partnership: An LLP is similar in some ways to a limited partnership, except that the individual members have lower liabilities to any debts which may arise from running the business. Limited liability partnerships they are not rare today and account for less than 11.2% of all partnerships in the UK. There are more administrative duties involved compared to the partnership business structure. In fact, an LLP is more similar to operating a limited company. In terms of liability, the limited liability partnership is itself liable for debts run up in running the business, rather that the individual members of the LLP. As a result, limited liability partnerships are only recommended for profit running businesses.
Limited Company: The business is registered with Companies House and is an entity of its own. There are more rules associated with running a business this way but there may be tax advantages. Those involved have shares in the business proportional to their involvement. A limited company is regarded in law as a separate legal personality, distinct from its shareholders.
So, you can be a sole trader, a limited partnership, limited liability partnership (LLP), a private limited company - the choice is yours. However, before you begin trading, you need to decide which legal form of business is best for you.
The decision will affect the way you are taxed and accounting records you will have to keep. Even if you are going to work on your own from home, think about whether might be advantages in forming a limited liability partnership or a limited company.
Private Limited Сompanies: This is generally the best legal form for film companies to use. Limited companies are cheap and easy to set up and they protect the directors by limiting their liability for any debts run up by the company to the amount that they have invested in it. However, this protection is removed if any director acts in any way that is unlawful, negligent or not in the best interests of the company (i.e. in the best interests of the shareholders on an ongoing basis). The directors are also liable if the company continues to trade beyond the point when it can reasonably expect to meet its outstanding liabilities. In this situation, the directors are personally responsible for any additional liabilities incurred after the company has reached this point.
E-Quick
Economy
Premier
E-Quick Company Formation from only £32.00!
The E-Quick business formation package is our most popular package with UK residents. It is ideal for small and medium businesses that have their own address in the UK, which can be used as a registered office address of the company. We will incorporate your company from scratch using your own registered office address, and appoint your own candidates to the roles of director, secretary (if needed), and a shareholder. Upon company registration, these details will be recorded as the original details of your company. The government and filing fees are included in the price of this package. A certificate of incorporation, Coddan' model of the memorandum & articles of association, the combined registers, share certificates and minutes of the first directors' meeting (usually not provided by other agents) will be sent directly to you via e-mail immediately following the formation of your company.
THE E-QUICK PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. Registered office address in London for 1 year - £50.00. 2. Nominee secretary for 1 year - £125.00. 3. Nominee director for 1 year - £350.00. 4. Laminated certificate of incorporation - £5.95. 5. Hard bound copies of your memorandum & articles of association - £14.00. 6. Two share certificates printed in an elegant format - £8.00. 7. Certificate of good standing - £45.00. 8. A corporate kit: a register of directors, secretaries, members, and debentures, and a minute book - £40.00. 9. A corporate tailor-made rubber stamp - £17.00. 10. Domain name registration for two years - £16.00. 11. Notarisation & apostille certification of the corporate documents. 12. Opening a business account in the UK or in offshore jurisdictions.
Economy Company Formation With Our Registered Office Address from only £82.00!
The Economy is our most popular package for small and medium size businesses, such as those being run by a sole director from home, who would like a separate, prestigious registered office address to be displayed on the public record; and for companies owned by overseas residents, who still need a local registered office address but would rather not open local offices. We will incorporate your company from scratch using our own registered office address in London, and appoint your own candidates to the roles of director, secretary (if needed), and a shareholder. Upon company registration, these details will be recorded as the original details of your company. The government and filing fees are included in the price of this package. A certificate of incorporation, Coddan' model of the memorandum & articles of association, the combined registers, share certificates and minutes of the first directors' meeting (usually not provided by other agents) will be sent directly to you via e-mail immediately following the formation of your company.
THE ECONOMY PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. Nominee secretary for 1 year - £125.00. 2. Nominee director for 1 year - £350.00. 3. Laminated certificate of incorporation - £5.95. 4. Hard bound copies of your memorandum & articles of association - £14.00. 5. Two share certificates printed in an elegant format - £8.00. 6. Certificate of good standing - £45.00. 7. A corporate kit: a register of directors, secretaries, members, and debentures, and a minute book - £40.00. 8. A corporate tailor-made rubber stamp - £17.00. 9. Domain name registration for two years - £16.00. 10. Notarisation & apostille certification of the corporate documents. 11. Opening a business account in the UK or in offshore jurisdictions.
Premier Company Formation With Our Registered Office Address & a Nominee Secretary from only £207.00!
This is another one very popular package for small and medium size businesses, such as those being run by a sole director from home, who would like a separate, prestigious registered office address to be displayed on the public record, and for companies owned by overseas residents who still need a local registered office address but would rather not open local offices. This package is often chosen by such customers, who are looking to minimise a sole director personal liability (and who are not quite familiar with the new UK corporate legislation), because this package includes a provision of a nominee secretary for 12 months. We will incorporate your company from scratch using one of our registered office address in London, and appointing our nominee secretary. We will appoint your own candidates to the roles of director, and shareholder. Upon formation, these details will be recorded as the original details of your company. The government and filing fees are included in the price of this package. The following hard bound copy of corporate documents will be posted to you upon formation of your company: a laminated copy of the certificate of incorporation of your company; a hard bound copy of the memorandum and articles of association; a hard bound copy of the minutes of the first meeting of directors; two elegant printed share certificates, and your company register.
THE PREMIER PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. Nominee director for 1 year - £350.00. 2. Laminated certificate of incorporation - £5.95. 3. Hard bound copies of your memorandum & articles of association - £14.00. 4. Two share certificates printed in an elegant format - £8.00. 5. Certificate of good standing - £45.00. 6. A corporate kit: a register of directors, secretaries, members, and debentures, and a minute book - £40.00. 7. A corporate tailor-made rubber stamp - £17.00. 8. Domain name registration for two years - £16.00. 9. Notarisation & apostille certification of the corporate documents. 10. Opening a business account in the UK or in offshore jurisdictions.
When creating a limited company, directors must be clear about their individual rights and responsibilities; the rights and responsibilities of their fellow directors; the fundamental issues that will need the unanimous agreement of all directors; and the procedures that will be put in place for resolving any disputes. Directors should make sure that they are familiar with the company's internal rules and procedures and that they read all documents (e.g. minutes of board meetings) carefully before signing them.
Being a director of a limited company carries a number of additional responsibilities. Companies are obliged to prepare annual accounts and file a copy with Companies House. Company law requires that certain information appears on all correspondence issued by the company.
Get help from Coddan to understand what type of business entity will be much suitable for your current business needs and requiriments.
How Do I Register My Company Name?
If you are going to do business as a limited company or as an LLP, please read our companies formations guidance & FAQs (FAQs: Company Names), before you will decide on a name. There are certain checks that need to be carried out before a company registers a particular name. Firstly, the name must be available for registration at Companies House. After you've completed the process of determining whether your desired company or partnership name is available for use, another set of considerations also comes into play - trademark, trade name and service mark considerations.
Company name FAQs section tells you how you can name a business, and what words you are not allowed to use without permission or proper entitlement, such as the words "Royal", "Authority", "International" and so on. It also explains the requirements you must meet if you are going to trade under a name which is not name of your company (if you are a company) or your own name if you are sole trader or partnership. You can use the service of Coddan - we will make sure the name you have chosen meets these requirements.
If you decide to use a business name, you must display certain information in a prominent place where you work (even if you are working from a shed in your garden). This information must also be on all business letterheads, invoices, and receipts and so on. It is up to what style you use, but it must include your business name and the company name, name of each partner or name of sole trader, whichever is appropriate and your permanent business address.
Name Restrictions
If you decide to form a limited company, you need to know about the rules and regulations which apply to your business entity in according to the Companies Act.
As it was mentioned above, the name may not include any of a list of prohibited words (including "Royal", "British" etc.); and (if the same directors are involved) may not be the same name as a company that has been declared insolvent within the last five years. Furthermore, the name of the company cannot imply that it is part of a larger corporate structure if this is not in fact the case. It is possible to register a name which is similar to an existing name - but this may be subject to challenge by the existing company within twelve months of registration, particularly if there is any suggestion that the new company is attempting to pass itself off to customers as the better known brand. If the company is trading internationally, the checks will also need to ensure that the name will work, and is not already being used, in other countries.
The company name does not have to be the same as the trading name but the company must always make clear when it is trading under a different name than that under which it is registered. The exact company name must appear on all company stationery and correspondence.
If you decide to form a limited liability partnership, you also need to know about the rules and regulations explained in the Limited Liability Partnerships Act.
Restrictions on names and the rules on that information you must give are the some as those individuals and partnerships going into business. However, you mush also be sure that there will be no objection to the name you choose. This could happen if the name you want is the same or similar to a name already being used. This a fairly important point, because if you are told to change your name, it could affect your business a lot, and not only in money.
Patents, Copyrights and Trademarks
Copyright, trademark and patent law protects your ideas form being exploited by rival business. They also prevent someone using your 'intellectual property' without your permission.
If you have invented a real money-spinner which could be developed into a product, you might want to apply for a patent. If you do, you will find it a very complicated procedure. We strongly recommend you talk to a patent agent. The Chartered Institute of Patent agents or the Patent Office will be able to help you. You also can apply to Coddan for the required assistance. Remember, even if you have a patent, there could be a long and expensive legal battle trying to stop other people using it.
When you decide on a name for your firm product, or you have designed a logo, you can apply for the trademark to be registered. This will give you a great legal protection. Coddan CPM can help you to register your trademark in the UK, EU or under the Madrid Protocol, please do not hesitate to contact us regarding this issue.
How Do The Trading Laws Affect You?
There is a wide range of laws to protect consumers, employees, the general public and business themselves. So that is important that you have at least a basic understanding of the laws and how it affects you and your business. Coddan can tell you more about the existing trading laws, applicable to your activity, but the following Acts of the Parliament are important to all businesses: -
Consumer Protection Act 1978;
Trade Description Acts 1968;
Sale of Goods Act 1979;
Health and Safety at Work Act, etc 1974;
Unfair Contact Terms Act 1977.
Whatever your business, as far as consumers are concerned, there are 3 trading standards which are almost bound to affect you: - 1. If goods are faulty, consumer can have a full refund or part of a refund. Or you can agree to repair or replace the goods. A notice which says "No Refunds" is not legal. In some cases, displaying of such a notice can be a criminal offence. 2. Goods must always live up to the claims you make for them. Fashion boots described as waterproof must keep out rain and protect people's feet against puddles. If you label goods falsely, you could be prosecuted and buyers would be entitled to their money back. 3. Goods must meet certain safety standards. If a child in injured or poisoned by a toy, or there is an accident with a faulty kettle, you could be prosecuted and a large claim could be made against you for damage. Although these safety standards are not all part of the law, if you are in the kind of business where this could happen, it would wise to get the insurance cover.
Insurance
Insurance is essential from the start for almost all kinds of business. The purpose of the insurance is to provide cover against risks. All small firms are particularly vulnerable to one-off disasters; an important management issue will be choosing appropriate insurance policies to reduce the effect of bad luck. Some types of small business insurance you may wish to take out for peace of mind (such as contents insurance), others are required by law. You should seek professional advice and make sure you take out the appropriate cover for your business needs.
Insurance You Must Have by Law
Companies (and their directors - i.e. you!) must obey hundreds of pages of rules and regulations - for example, tax law and company law. Some of these rules are obscure and pointless - but unfortunately being unaware of or disagreeing with a law is no defence. The best advice is to talk to an accountant to make sure you stay on the right side of the law. Whatever type of business you run, you will need to take out some kind of insurance just in case things go wrong. Some insurance you must take out by law, and other policies were designed to give you peace of mind. These are the main types of business insurance available: -
Public liability insurance: This type of policy will protect your business form any third party claims as a result of personal injury or even death, or property damage which has taken place as a result of your business activities. You should take out cover if members of the public, customers or clients visit your business premises. Public liability insurance will also cover any expenses and legal fees incurred in the defence of any claims.
What is it? If members of the public, customers or clients visit your business premises, you should consider taking out a public liability insurance policy. Even if you run a home-based business, and your customers visit you sometimes, you might consider taking out a policy.
What does public liability insurance cover? This type of insurance will cover the cost of claims if a member of the public is injured by you, your employees, or accidentally whilst visiting your business. It will also cover you if you damage property belonging to someone else, while carrying out business activities.
Top 10 General Advantages of UK Private Limited Companies:
1. Liability is, in the vast majority of cases, strictly limited to the investments made by the shareholders. 2. Company officers are not personally liable for their actions unless there is a clear and serious breach of their fiduciary duty. 3. Limited companies often benefit from greater prestige than their sole proprietorship or partnership counterparts. The reason is because such an enterprise normally requires more planning and thus is deemed more credible. 4. Limited companies often benefit from significant tax advantages. In fact, many countries around the world give exclusive tax incentives to this type of entity. 5. The rights of shareholders are normally clearly defined and protected. 6. Corporate taxes only become payable after the end of the financial year. This means money that would otherwise be taxed on a monthly or quarterly basis, is available to earn further interest before the final payment of tax. 7. You need only appoint one director, and one shareholder. Appointment of a company secretary is optional from April, 2008. 8. Directors, secretary and shareholders can be of any nationality. 9. After a company is registered, there are no obligations for it to start trading within a specified time period. 10. A company is overseas resident if its management and control abide outside the UK. Non-resident companies are generally exempt from tax on capital gains.
Essentially, as well as covering the cost of the damage itself, a typical policy will also cover any legal representation fees and expenses which are incurred in defending your claim. You should remember that public liability insurance only covers third party claims, and not those made by your own employees. You should read our guide to employers liability insurance for more information. During your period of cover, you should always let your insurance provider know if any of your business circumstances change.
Public liability insurance claims: Here are some examples of when you will typically be able to claim on your policy: - 1. You are a sole trader IT support engineer. While visiting a customer site, you knock a cup of tea down the back of a server, knocking out the client's network and damaging the hardware beyond repair. 2. You own a carpet showroom. One of your customers comes in to order some stock, but trips over a loose piece of carpet you have on display. Your policy will cover the customer's claim for injuries sustained. 3. You are an electrician. You re-wire a flat as part of a refurbishment, but connect the fuse box incorrectly. As a result, one of the circuits burns out, and the owner makes a claim against you for the damage caused.
Amount of cover required: The amount of cover you need will vary according to your business type and other factors. Many small businesses will take out a minimum of £1 million of cover, although in some circumstances you may be required to take out £5 million or £10 million of cover, for example, if it's specified in contracts between you and certain customers. Cover is not particularly expensive, and you may make significant savings by buying a general insurance policy for your business, which typically includes office insurance and employers liability, as well as public liability cover.
Employers' liability insurance: This type of cover is compulsory if you have any employees (subject to some exemptions) and covers claims for accidents or sickness. You do not need employers' liability insurance if you are a sole trader, of if you employ only close family members. You will need cover if you ever use temporary (or seasonal) workers. If you are a limited company owner, you are also exempt if you won at least 50% of the share capital. Most policies will provide around £10m of cover, but although the figure is high, the cost of the actual insurance is relatively low. If you are not covered by an adequate employers' liability insurance policy, the HSE can fine your business by up to £2,500 per day.
What is employers liability insurance? Employers Liability Insurance covers your small business if an employee is injured or falls ill at work. All employers must take out this type of insurance, although there are a few exemptions, such as if you are the sole employee of your limited company, and also own at least 50% of the share capital in the company. If you are a sole trader and do not employ anyone, or you only employ close family members, you should also be exempt. However, if you occasionally hire staff or use temps or seasonal workers, you must take out employers liability insurance.
What does it cover? Employers liability insurance will meet the cost of compensation for injuries sustained to your employees (or illnesses), whether caused on or off site. It should be noted that this type of insurance only covers your employees. Potential claims made against you by other third parties (members of the public) can be covered by public liability insurance. If any of your employees are injured in a motoring accident, any claims may be covered separately by your motor insurance policy. Generally, someone is defined as your employee if: - 1. You deduct National Insurance contributions and income tax from the salary you pay them; 2. You control when, where and how they work; 3. They cannot employ a substitute when they are unavailable to work
How much cover do I need? If you are required to take out employers liability insurance, you must be covered for at least £5 million. In practice, most insurers will offer £10 million of cover. Once you have taken out cover, you must display the insurance certificate in a place where your employee's can view it. The Health & Safety Executive have the powers to fine your business up to £2,500 per day if you are not covered properly for this type of insurance.
Professional indemnity (PI) insurance: Professional indemnity insurance covers small business people who provide specialist advice to other companies. People who are in the business of selling their skills or knowledge may wish to be protected in the event of a negligence claim as a result of services they have provided to a third party. PI insurance will cover the costs of any compensation sought by a client as a result of negligence, and should also cover any legal costs. Knowledge-based professionals, such as IT contractors, consultants, designers and engineers are increasingly likely to take out professional indemnity insurance, and some clients may insist that cover is in place before hiring your services.
What does the professional insurance cover?
A negligent act, or error made during the course of your duties;
Unintentional infringement of intellectual property rights;
Loss of data or documents entrusted to you;
Unintentional breach of confidence;
Unintentional libel or slander;
Dishonesty.
Things to bear in mind before taking out a PI policy: - 1. Make sure you have an adequate amount of cover. Typical cover starts at around the £100,000 mark. Most experts suggest you take out as much cover as is reasonably affordable. 2. Consider taking out 'retroactive cover' - This will cover you for work done in the past, as well as in the future. You can even have your policy backdated to when you initially set up your business. 3. Is your profession / industry covered? - Most professions are covered, however a specialist insurer should be able to provide a tailored quote if not. 4. Run off cover - If you retire or change professions, this option will ensure that you are covered for claims made for many years into the future. 5. Limitations - Most insurers have restrictions, such as the maximum turnover covered by an 'off the shelf' policy, or the maximum number of employees you can have working in your business. Again, a specialist insurer should be able to provide a tailored quote if you need it.
Pensions: One of the drawbacks of being your own boss is that nobody else is making any plans for your retirement. Therefore, if you want a comfortable retirement you will have to make your own plans - and for most people this means setting up their own pension scheme. Fortunately, the government makes this a little bit easier by allowing you to claim tax relief on your pension contributions.
As pension scheme, contributions are a tax allowable deduction for IR35 purposes it is very important for freelancers caught by IR35 to carefully review this subject.
Life insurance: What happens if you are ill or injured? What if you die? How will your bills be paid, and who will look after your family? When you are employed in a regular job, the answer to some of these questions may be "my employer will make sure we are alright". Unfortunately when you are your own boss, you are your own employer - so if you do not make plans for illness, injury or death, nobody else will do it for you!
Recommended Insurance
To Register Yourself as a Self-Employed - £52.00!
If you need to complete a self-assessment tax return for the first time, you need to register with HM Revenue and Customs (HMRC). You will also need to use the registration forms to tell HMRC if you become self-employed, even if you already complete a tax return. If your circumstances have changed recently you may need to fill in a self assessment tax return to tell HMRC about new income or capital gains or to claim expenses or reliefs. For example, you may have: -
- Started your own business; - Untaxed income from property or investments; - Expenses to claim (you need a tax return if they're above £2,500); - Capital gains tax to pay.
It is best if you register with HMRC as soon as your circumstances change. The latest you can register is by 5 October after the end of the tax year for which you need a tax return. The tax year runs from 6 April one year to 5 April the next. Therefore, if, for example, you have tax to pay on rent from a property in the 2010-11 tax years, you need to let HMRC know by 5 October 2011.
THIS PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. A pliers seal - £20.00. 2. A tailor-made rubber stamp - £17.00. 3. Domain name registration for two years - £16.00. 4. Business name registration (trading as "…").
Contents insurance: This is standard insurance to protect the fixtures and fittings of your business premises. If you work from home, make sure that your existing policy covers your business too. If you own rather than rent premises you will also need to take out buildings insurance cover.
Motor insurance: If your business has any vehicles, they must be adequately insured. You must inform your insurer if you intend to use your own vehicle for business use (or you may not be covered in the event of a claim).
Equipment insurance: As the name suggests, this will cover you in the event that any office equipment is damaged accidentally.
Legal expenses cover: This type of insurance will protect you against the expense of court costs, and the costs related to defending claims made against your business.
Directors and officers insurance: Directors and officers insurance covers company directors and officers in the event that they are accused of being engaged in wrongful or misleading acts whilst conducting company business. Typically, a variety of people or groups may take action against directors - including shareholders, customers, or regulatory bodies. This type of cover will reimburse company directors and officers in such an eventuality.
Why do you need cover? Many directors assume that they are covered for legal actions against them as they have a "limited liability company". This may not be true in all cases, and claimants may pursue you personally depending on the circumstances of the claim. You may find that investors will often require your company to have taken out directors and officers insurance cover before providing funding. New directors who join your company may also insist on sufficient directors' insurance being in place, as they will not want to risk their own personal assets in the event of a claim against the company.
What does directors and officers insurance cover? Here are some of the main areas which will be covered by a typical directors and officers insurance policy: -
Often covers employment practices liability, which constitutes a large proportion of claims on such policies. This covers harassment and discrimination claims.
Legislative breaches - e.g. Companies Act, Health & Safety Act, Data Protection Act, Insolvency Act, and hundreds of others.
Abusing powers, or acting contrary to the company's memorandum articles of association.
Alleged financial mismanagement of the company.
Disputes arising from mergers and acquisition activity.
Action arising from potentially libelous or slanderous statements made by directors.
Who might claim against you? Possible claimants might include: -
Shareholders;
Employees;
Creditors;
Auditors;
Customers;
Suppliers;
Regulators.
Examples of Claims: - 1. The Health & Safety Executive (HSE) launched a public enquiry following the death of a staff member while installing cabling on an office building. A company director was compelled to give evidence at the hearing. The legal costs of representing the director would be met by the company's directors and officers insurance policy. 2. A venture capitalist firm have made an investment in your company. Several months after the deal was finalised, the VC firm alleges that the financial information provided to them prior to the investment was misleading and inaccurate. They make a claim against the financial director of your company. This type of claim would typically be met by directors and officers insurance policy. 3. An employee accuses a director of harassment and discrimination. This is one of the most common types of claims to be covered by directors & officers insurance policies.
Other Types of Business Insurance
Buildings & contents cover: Standard insurance to protect your business property and fixtures/fittings. If you are working from home, you may need to inform your household insurer to ensure that this extends to your home business needs.
Tax & VAT investigation insurance: Protects you in the event of an investigation by the tax authorites - more and more contractors are investing in this type of policy in light of IR35 and the complications it may bring from 2001 onwards. Would typically include protection against VAT disputes with HM Customs &;amp Excise and employer compliance investigations (PAYE, NIC, P11D). This type of cover should not cost too much, although some financial advisors resell packages at a premium, so it is best to shop around.
How Much Do These Policies Cost?
Policies of this type are far less expensive than you may think, although the final cost will depend on your individual circumstances. The cost of individual polices tend to depend on the following factors: -
The annual turnover of a freelancer's company;
The nature of your business operation.
Whether the freelancer works through an agency, or direct with the client. Rates for freelancers working through agencies tend to be lower, but not in all cases.
Insurance and IR35: - should you wish to take out public and employers liability insurance, this should be claimed as part of the IR35 "5% general allowances".
Professional Indemnity Insurance: - on the other hand, can be claimed as a "Schedule E" expense - in addition to the 5% allowance, so this will be an attractive scheme for many. Professional Indemnity insurance is the most popular scheme for freelancers.
Am I Need to Have a License?
With extensive experience in product development, procurement, sourcing and product/brand marketing, gained in both retail and supply chain, in the UK and internationally, we have an in depth knowledge of the consumer goods process, from concept to customer service. Although this seems a very broad range of talents, they have all developed from a core starting competence of retail buying/category management. The following businesses are just some of these which need special licenses to trade: -
Accountants;
Appraisers;
Auctioneers;
Auction sale rooms;
Betting offices;
Bill collectors;
Billiard halls;
Bingo halls;
Economy
Premier
Deluxe
UK Limited Liability Partnership from only £125.00!
All inclusive limited liability partnership (LLP) registration. Each limited liability partnership package includes all statutory paperwork and is fully compliant with company and partnership law. All our limited liability partnerships are registered as general trading LLPs and can be used to conduct any type of business. A certificate of registration, the partnership agreement, and other relevant documents will be sent directly to you via e-mail immediately following the formation of your LLP. We will incorporate your LLP from scratch using your own registered office address, and appoint your own candidates to the roles of members (partners). Upon formation, these details will be recorded as the original details of your LLP. All government and filing fees are included in the cost of our packages. It will take just couple of minutes to complete the online registration form, then your limited liability partnership could be up and running within 4-6 working hours.
THE ECONOMY PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. Laminated hard-copy of the certificate of registration - £5.95. 2. Hard bound copies of your partnership agreement (four different options) - £14.00. 3. Two membership certificates printed in an elegant format - £8.00. 4. Certificate of good standing - £45.00. 5. A partnership kit: register of members, and debentures, and a minute book - £40.00. 6. Partnership pliers seal - £20.00. 7. Partnership tailor-made rubber stamp - £17.00. 8. Domain name registration for two years - £16.00. 9. Notarisation & apostille certification of the LLP documents.
UK LLP With a Registered Office Address in England For Just £175.00!
All inclusive limited liability partnership registration. Each limited liability partnership package includes all statutory paperwork and is fully compliant with company and partnership law. All our UK LLPs are registered as general trading partnerships and can be used to conduct any type of business. A certificate of registration, the partnership agreement, and other relevant documents will be sent directly to you via e-mail immediately following the incorporation of your LLP. We will register your limited liability partnership from scratch using one of our own registered office addresses in England, and appoint your own candidates to the roles of members (partners). Upon incorporation, these details will be recorded as the original details of your limited liability partnership. All government and filing fees are included in the cost of our LLP registration packages. It will take just couple of minutes to complete the online registration form, then your LLP could be up and running within 4-6 working hours.
THE PREMIER PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. A laminated hard-copy of the certificate of registration - £5.95. 2. Hard bound copies of your partnership agreement (four different options) - £14.00. 3. Two memebership certificates printed in an elegant format - £8.00. 4. Certificate of good standing - £45.00. 5. A partnership kit: register members, and debentures, and a minute book - £40.00. 6. Partnership pliers seal - £20.00. 7. Partnership tailor-made rubber stamp - £17.00. 8. Domain name registration for two years - £16.00. 9. Notarisation & apostille certification of the LLP documents.
UK LLP Registration with a Registered Office Address and Two Nominee Members For Just £525.00!
All inclusive UK LLP incorporation. Each limited liability partnership package includes all statutory paperwork and is fully compliant with company and partnership law. All our UK limited liability partnerships are registered as general trading partnerships and can be used to conduct any type of business. We will incorporate your LLP from scratch using one of our own registered office addresses in England; appoint our two candidates to the role of a nominee members (partners). Upon LLP incorporation, these details will be recorded as the original details of your limited liability partnership. All government and filing fees are included in the cost of our packages. The following documents, will be posted to you upon formation of your LLP: a hard bound copy of corporate documents includes: a laminated copy of the certificate of registration of your LLP, a hard bound copy of the partnership agreement, a hard bound copy of the minutes of the first meeting of members (partners), power of attorney, membership certificates, and your partnership register. It will take just couple of minutes to complete the online LLP registration form, then your LLP could be set-up and running within 4-6 working hours.
THE DELUXE PACKAGE CAN BE UPGRADED WITH ANY OF THE FOLLOWING FEATURES:
1. An additional laminated hard-copy of the certificate of incorporation - £5.95. 2. An additional hard bound copies of your partnership agreement (four different options) - £14.00. 3. Additional two membership certificates printed in an elegant format - £8.00. 4. Certificate of good standing - £45.00. 5. A partnership kit: register of members, and debentures, and a minute book - £40.00. 6. Partnership pliers seal - £20.00. 7. Partnership tailor-made rubber stamp - £17.00. 8. Domain name registration for two years - £16.00. 9. Notarisation & apostille certification of the LLP documents.
Businesses Regulated by the Financial Service Authority (FSA)
The following businesses are need special licenses issued by the Financial Service Authority (FSA): -
Accepting deposits;
Issuing e-money;
Effecting or carrying out contracts of insurance as principal;
Dealing in investments (as principal or agent);
Arranging deals in investments;
Arranging home finance activities;
Operating a multilateral trading facility;
Managing investments;
Assisting in the administration and performance of a contract of insurance;
Safeguarding and administering investments;
Sending dematerialised instructions;
Establishing etc collective investment schemes;
Establishing etc stakeholder pension schemes;
Providing basic advice on stakeholder products;
Advising on investments;
Advising on home finance activities;
Entering funeral plan contracts;
Entering into a home finance activity;
Administering a home finance activity;
Agreeing to do most of the above activities;
Deposits;
Electronic money;
Rights under a contract of insurance;
Shares etc;
Instruments creating or acknowledging indebtedness;
Sukuk (shariah compliant debt instruments);
Government and public securities;
Instruments giving entitlement to investments;
Certificates representing certain securities;
Units in a collective investment scheme;
Rights under a stakeholder pension scheme;
Rights under personal pension scheme;
Options;
Futures;
Contracts for differences;
Rights under funeral plan contracts;
Rights under regulated mortgage contracts;
Rights under a home reversion plan;
Rights under a home purchase plan;
Effecting or carrying out contracts of insurance as principal;
Dealing in investments (as principal or agent);
Arranging deals in investments;
Arranging home finance activities;
Operating a multilateral trading facility;
Managing investments;
Assisting in the administration and performance of a contract of insurance;
Safeguarding and administering investments;
Sending dematerialised instructions;
Establishing etc collective investment schemes;
Establishing etc stakeholder pension schemes;
Providing basic advice on stakeholder products;
Advising on investments;
Advising on home finance activities;
Entering funeral plan contracts;
Entering into a home finance activity;
Administering a home finance activity;
Agreeing to do most of the above activities.
Our professional service to support companies and partnerships applying to the FSA for authorisation to carry on regulated activities includes the provision and tailoring of all relevant compliance forms and documents, advice on the scope of permission and prudential category, completion of the application forms, submission to the FSA and post submission liaison with the FSA. We take you all the way from start to obtaining your permission at a fixed price.
Are You Business at the Law?
Have you got professional advise from solicitor and an accountant?
Have you chosen a legal form for your business - sole trader, partnership, limited liability partnership, limited company or a co-operative?
Have you met with business or company names regulations?
Have you met with the laws affecting business premises and trading?
Have you thought about getting patents, or copyright or trademark registration?
Have you asserted copyright on creative artwork or writing?
Have you told Inland Revenue and the Contribution Agency Office about your business?
Do you know whether and how to register for VAT?
Have you met the Data Protection requirements?
Keeping Records
You will need to keep records for your own sake, but you must also keep them by law to support your VAT, other tax and National Insurance contribution payments and claims. If you are a limited company or an LLP, there are further conditions to do with your annual reports and accounts. In the case of companies, there are also condition concerning records of board meeting and transactions in your company's shares.
In you are a sole trader or a partner, the tax rules are different but you still need to produce completed financial records. Please do not hesitate to use Coddan's accounting department to help you with your accountancy and tax questions.
If you plan to keep any information about people electronically, for example on a personal computer, you must notify The Information Commissioner under the Data Protection Act 1998. Under this Act, computer users must follow 8 Data Protection Principles for using computers.
The Data Protection Act has also been extended to certain manual records. The data Protection Act will affect many aspects of your business and you should obtain professional advice on these implications in your precise business circumstances.
Complying with Data Protection Legislation
The 1998 Data Protection Act significantly changed the use of customer data. Paper records must now comply, as well as computerised records. Companies must be open about how they use data and must follow sound information-handling practice. The Act gives every individual access to information held about themselves. All data users must register with the Data Protection Registrar and comply with the principles of the Act. Companies should use customer data to benefit customers. Many simply hold data without using it. The issue of regulation for the Internet is a difficult one.
Companies must ensure the data they hold is accurate and up to date. Get customers' permission before passing data or continuing to contact them. Reassure customers that you treat their data with the highest levels of confidentiality. Use data, within the spirit of the Act, to contact customers with information that you believe may be of interest to them. Make it easy for customers to respond or change their details.
Understanding the Data Protection
Data protection is a legal requirement for all employers. But do you really understand what it means? Data held on computers is governed by the Data Protection Act 1998. The Act puts in place eight principles to make sure that your information is handled properly. These principles require that data must be: -
Fairly and lawfully processed;
Processed for limited purposes;
Adequate, relevant and not excessive;
Accurate;
Not kept for longer than is necessary;
Processed in line with your rights;
Secure; and,
Not transferred to countries without adequate protection.
By law data controllers (the person nominated by a business to manage data on its behalf) have to keep to these principles. These principles put a significant obligation onto business. They require that information stored on computerised records (this includes databases, email records, electronic documents and other electronic communications and may cover personnel records, minutes and other sensitive information) must be accurate, kept only for a specific purpose and for a specific period of time, and importantly, that information be kept secure.
Data Protection Act FAQs
How do I know if my data has to comply with the Act? - Even if you only hold a small number of customer names and addresses, they constitute data under the terms of the Act. If in doubt, check.
My company is part of a larger group. Can I pass customer data to other companies in the group? - You should ask the customer's permission before passing data to any other parties, even internal ones.
How long can I hold data on a customer? - The Act does not specify a time limit, but recommends that it should not be held longer than necessary. It is in the spirit of the Act that you should not just hold data, but should use it to benefit the customer, for example, by providing them with information that you believe is useful.
What happens if data is inaccurate? - According to the Act, data must be accurate and up to date. That puts the onus on you to maintain it properly and check with customers that it is accurate.
Making It Happen
Check all your records - the use of customer data changed significantly when the 1998 Data Protection Act came into force. The 1994 Act only covered data held electronically which could be processed on a computer. However, the 1998 version included paper records.
Paper records must comply - in theory this means that if you have a box of file cards with names and addresses, you should register that information with the Data Protection Registrar (DPR). Many sales and customer service teams still use this type of filing, even in relatively large companies.
Use data properly - the basic premise behind the Data Protection Act is: if you have data, use it properly. The Act works in two ways: -
Firstly, it places obligations on data users. They must be open about how they use data and must follow sound information-handling practice which is specified in the Act.
Secondly, the Act gives every individual access to information held about themselves. It also allows them to have the information corrected or deleted where appropriate if it is wrong, and gives the right to seek compensation for damage and associated distress through the courts.
Register your data - under the Data Protection Act, all data users must register with the DPR. Once registered, users must comply with the principles contained in the Act. They must: -
Obtain and process personal data fairly and lawfully;
Hold the data only for the purposes specified in the register entry;
Only hold accurate data which is relevant and not excessive for the purpose for which it is held;
Ensure personal data is accurate and, where necessary, kept up to date;
Not hold data for longer than necessary.
Use customer data to benefit customers - not all companies comply with the spirit of the Act. According to research, some of the organisations holding most data, particularly in financial services, don't seem to use it at all, resulting in poor communications with customers. Many companies have simply been collecting data and not really putting it to good effect. The data is itself very valuable, but customers may feel that they have handed over a great deal of information on their lives without seeing any benefit. The issue of data collection becomes even more complicated with the growth of the Internet. Not only will data collection be faster; consumers will expect higher levels of service than ever.
Be aware of Internet data - the issue of regulation for the Internet is a difficult one. The World Wide Web is based on principles of freely available information on a worldwide scale. However, consumers need to be protected so that they can use the Internet with confidence.
Check Data accuracy - recent changes to the Data Protection Act mean that companies must ensure the data they hold is accurate and up to date. As part of your commitment to customer service, you should aim to offer customers useful and timely information that meets their individual requirements. To do this you might hold contact details, together with information on customers' personal interests which they have provided in the past. Because circumstances change, make sure that you have your customers' correct details and check that they are happy for the company to continue to contact them.
Customers have a right under the Data Protection Act to ask for a copy of the information you hold on them and to have any inaccuracies corrected.
Get the customer's permission - ask customers to let you know if they do not wish you to give this information to other parties. Tell them that you would like to continue contacting them. However, if the customer prefers you not to, ask them to let you know. If they do not reply within a specified time frame, tell them that you will assume that it is okay to continue contacting them.
Reassure customers about Data - customers should be assured that you treat their data with the highest levels of confidentiality. You should not disclose their information, without their consent, to third parties, any party within your own organisation, dealers or other organisations acting on your behalf.
Use the information to maintain contact - if you have data, you can use it-within the spirit of the Act-to contact customers with information about products and services that you believe may be of interest to them. You can also use the information for marketing, research or sales tracking purposes. Customer names and addresses may also be used to process orders and maintain accounts with the company or its dealers.
Make it easy for customers to respond - allow customers to respond to requests for permission or change of details by post, fax or e-mail. Let them know that they should reply if they would like you to stop contacting them, or if they want to change contact details. Provide a helpline that customers can call if they need any further information on your data policy or on the data you hold.
Common Mistakes
Storing data and not using it - the Act says that you should not hold data for longer than necessary. Consumer attitudes say that they should see some recognisable benefit for providing the information.
Using inaccurate data - the onus is on the company to ensure that data is accurate. This means contacting customers to ensure that information is up to date and accurate.
Failing to register data - the 1998 version of the Act widened the scope of data protection to include paper records. Even small organisations with apparently simple customer records must comply.
Making it difficult for customers to respond - the Act says that you must give customers access to any data you hold on them. That means you must make it easy for customers to contact you.
Premises
Before you choose a property for your business, talk to your solicitor and check with the local council. Make sure you are on the right side if the sometimes complicated regulations, like environmental health rules, which govern how premises can be used for trade. For example, if you are planning to start food business, you must register the premises you intend to use at least 28 days before you open, you must take these rules into account even if you are trading from home, where, for instance, you might need planning permission.
You need to look closely at business leases. Remember, they are not as easy to get out if as to get into.
What About My Tax Liabilities?
The amount of tax you need to pay will depend on a number of things, but you will generally pay less tax if you put down business expenses against your profit (this is another good reason why your business records are so important).
If you will require any assistance with the account, bookkeeping or tax planning questions, please do not hesitate to ask Coddan for help.
Tax, Profit and Income
If you are a sole trader, in a partnership or a member of an LLP, you must pay income tax. If you are limited company, you must pay corporation tax on the profits your company makes. You must also pay income tax on your wages. These will be paid by PAYE (Pay as You Earn) if you are an employee of the company.
In limited circumstances, an LLP may also become liable to Corporation Tax, e.g. on ceasing to trade.
VAT (Value Added Tax)
Each year, the Government sets the level of turnover, and if your business goes over this level, you must compulsory VAT registration apply for VAT registration. In some case, it might be best to register even if you are below this level. If you have any questions about the VAT, please ask Coddan for assistance. Our team of the experienced accountants and business consultants will be glad to help you further. VAT is simple enough if you pay VAT on all your supplies.
This is what happens: -
You charge VAT on certain goods and service, and send the VAT you collect to the Customs and Excise every month or quarter (3 month). In turn, you may be charged for VAT on goods and services you need to run your business, such as materials, legal fees, telephone bills and so on. If so, you can claim some or even all of it back. In practice, you simply take second 'outgoing' total from the first 'incoming' total.
Then you pay or claim the difference. This is not apply to VAT on imports, which you must pay as soon as the goods enter the country. If this is the part of your business, you maybe able to arrange a special bond through your bank which would help you put off such payments. The VAT regulations change constantly, so you need to keep up to date with developments.
Remember, VAT office take a firm line with the businesses that pay late or do not register when they should.
Employing People
At first you may be able to run your business by yourself, if not, or as your business expands, you may need to employ people. If you do need recruit employees, you should know you responsibilities as an employer.
What are My Responsibilities as an Employer?
Every employee, whose employment continues for one month or more, has the rights to receive written statement setting out certain details of the employment. This should be provided no later than two month after their employment starts.
This statement must include the following details: -
Name of the employer and the employee as well as their job and title description.
Their place of work.
The date of employee's employment and period of continuous employment began.
The terms and conditions relation to hours of work, holiday entitlement.
The scale and rate of pay, pay intervals and method of calculation.
Grievance procedures.
Sickness procedures, including sick pay.
Pension schemes.
Length of notice needed to end employment.
Any collective agreements.
Disciplinary rules including the process and process and any appeal arrangements.
Employee Contracts
All employees are entitled to receive a statement of their terms and conditions of employment, whether or not that is in the form of a formal contract, a letter of appointment or any other written form. If the employer only uses a letter of appointment, rather than a formal contract, however, the courts may imply contractual terms. It is always better, therefore, to issue a formal contract to all employees.
The content of the statement of employment must include: -
The employer and employee names;
The date on which employment commences;
The date on which the period of continuous employment began;
The scale, rate or method of calculating remuneration;
The intervals at which remuneration will be paid;
Any terms and conditions regarding hours of work;
Any terms and conditions relating to holidays, holiday pay, sick pay, pensions etc.;
The notice period entitlements for employer and employee;
The job title and/or a brief description;
The place of work;
If employment is not intended to be permanent, the period for which it is expected to continue or the end date of any fixed term;
Details of any collective agreements;
Details of any applicable disciplinary or grievance procedures.
Discrimination and the Law
Generally, when recruiting an employee, it is a illegal to discriminate on the ground of race, sex, disability and marital status, however there are certain limited exceptions. The anti-discrimination law continue to apply to all other parts of an employee's job, including wages and holiday entitlement after the recruitment process, Your business could be held liable for any discrimination of if you are trading as an individual you are trading as individual you could be personally liable foe discriminatory actions.
Tax and National Insurance Contributions
If you employ anybody, either full time or part time, you are responsible for deducting income tax and National Insurance Contributions (NICs) from their wages, and you must also pay the employer's share of the NICs. If you are not sure about the NICs, always consult with the Inland Revenue. There are different tax and National Insurance rules depending on you circumstances.
When you take on someone you need to tell your local tax office. They will send you document which show you how much you need to take out of each employee's wages earning and where to send the money. You must record each employee's earning and tax and National Insurance Contributions and tell your local tax office about these amounts every year.
In the case of National Insurance, the contributions for your employee will be in two parts. You must pay one part and your employee must pay the other. These contributions depends on how much you pay your employee. The Inland Revenue will collect them at same time as they collect any tax. Inland Revenue office or Coddan Accounting team will be able to give you more advise on the National Insurance. Please feel free to ask.
Your own National Insurance depends on your circumstances. If you are company director you will be treated in a similar way to your employees. You will be classed as an employee of your company and will pay contributions in the same way as your employees but, there is a special way to access director's National Insurance. You can get assistance in the local Inland Revenue office, or ask Coddan for help.
If you are sole trader, partner or member of an LLP you will need to contact Inland Revenue to get more information about your tax liability. You choose wherever to pay your National Insurance contributions every month by direct debit from your bank account, or every three month when you will receive a bill. Your contributions will be charged at the same rate each week. You may also have to pay an extra contribution or any profit your business makes. This is assessed and collected along with your income tax.
Health and Safety
You must make sure that, as far as is reasonably, the health, safety and welfare of your employees is a not at risk whilst they are at work. You may contact your local health and Safety Executive for advice and information which will help you set up important safe legal working conditions for employees.
Trade Unions
It is illegal to refuse a person employment because he or she is or is not a member of a trade union. You should know various law which protect employee's rights to choose whether to join a trade union.
Dismissing an Employee
We hope you will never have to take such a drastic step, but if you do, you must have a valid reason for dismissal and you must act reasonably and follow procedures. Unless the dismissal is for gloss misconduct, you must give employee notice of dismissal as set out in their contract. Failure to give proper notice may lead to a wrongful dismissal claim.
Sub-Contracting
One alternative to employing directly is to sub-contract some work. This may be more cost effective in ironing out short-term trading highs and laws, night alternative some of the responsibilities of an employer. However legal responsibilities can arise in this respect, for example under the Transfer of Undertakings (Protection of Employment) regulations 1981.
Contracts
Contracts do not have to be written down to be legally binding - but it is always better for both parties to have something in writing and signed. Under English law, there is no duty of good faith in a contract - the terms have to be clearly agreed to be binding on both parties. A contract should clearly establish your rights, the other parties rights and the consideration to be made by both parties. (Consideration must be present for a contract to exist but it does not have to be commensurate or equivalent on both sides.)
There are a number of different types of quasi-contractual agreement including: -
Heads of Agreement - this records the salient points agreed between the parties but may not be intended to be legally binding;
Letter of Intent - describing an intention to act in a certain way but which, again, may not be intended to be binding;
Comfort Letter - which can be agreed in place of a formal guarantee but is, again, not usually intended to be binding;
Memorandum of Understanding - recording the broad parameters reached between parties but, again, more often than not, not intended to be binding.
Any of these agreements can carry the force of a full contract if the parties agree, or may provide that specific terms are legally binding. Conversely, the parties can make everything "subject to contract" to make absolutely clear that none of the terms is intended to carry contractual force. Whatever their intentions, all parties should make absolutely clear what legal force they intend any of these documents to have.
An important point to remember is that lack of documentation does not equate to lack of contractual obligations. As mentioned above, the contract does not have to be in writing and lack of signature on a document does not necessarily mean that the terms are not binding. It just becomes more difficult to prove what was intended by both parties if documents are not properly signed off and agreed
The Law and You as an Employer
As an employer, it is essential you know about the following issues and how the law deals with them: -
Terms of Employment;
Redundancy - payments;
Insolvency
Pregnant women: maternity care, parental leave, time off for dependants;
Sick leave;
Health and Safety;
Union Membership;
Itemised pay statements;
Continuous employment;
Time off for public duties;
Unfair dismissal;
Rights on ending employment;
Dismissal;
Sub-contracting;
Industrial action ballots;
Discrimination: Sex, Racial, Disability;
Equal pay;
Picketing - Code of Practice.
You can get leaflets on the issues above from the Department of Trade and Industry, Advisory Conciliation and Arbitration Service of the Department of Social Security. The law in these areas change frequently and, you should know about the following current employment laws: -
Disability Discrimination Act 1995;
Employments Rights Act 1996;
Data Protection Act 1998;
Trade Union and Labour Relations (Consolidation Act 1992);
Trade Union Reform;
Employment Rights Act 1993;
Transfer of Undertakings (Protection of Employment) Regulations 1981;
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Employers' liability insurance: This type of cover is compulsory if you have any employees (subject to some exemptions) and covers claims for accidents or sickness. You do not need employers' liability insurance if you are a sole trader, of if you employ only close family members. You will need cover if you ever use temporary (or seasonal) workers. If you are a limited company owner, you are also exempt if you won at least 50% of the share capital. Most policies will provide around £10m of cover, but although the figure is high, the cost of the actual insurance is relatively low. If you are not covered by an adequate employers' liability insurance policy, the HSE can fine your business by up to £2,500 per day.
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