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I wish to start a business within the UK, which will be an online venture. However, I am unsure of a few things.

Firstly, I know I will have to pay income tax, assuming it reaches the threshold of £7k (I believe?), what other taxes do businesses have to pay.

Would I be able to operate as an individual (I will be the only employee for the moment, and I don't know when / if we will expand. Depends on how we do within the first few months. If I operate as an individual, do I still need to pay the other taxes?

Do I need anything specific to register as a business, such as already having an established business with revenue incoming, or not?

This business will not be publicly traded, and will be privately owned by just me. What form of registration do I need? (LLC, LTD etc)

Does it cost to register as a business?

Do i need to register my business name as a trademark also, or is that automatically covered due to the name being registered as a business?

What sort of records do I need to hold for the business? (in terms of finance), and would it be worth me getting an accountant to do this for me? All of my business funds will go through either PayPal or Google Checkout, so do I just need to present the quarterly earnings to the taxman, if so. I should be able to do that?

Thank you.

I'll edit if I come up with anymore questions.

Alex

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Your accountant can answer these questions for you with regions specific information. Go and call a good accountant. – Susan Jones Jul 27 '12 at 3:03

2 Answers

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I'll try to answer your questions in order:

Businesses don't pay income tax, individuals do. Businesses pay corporation tax on profits and Employer's National Insurance on employees. They also collect Employee's National Insurance and Income Tax on employee's salary, on behalf of the government (i.e. the business collects it and pays it to the government, but the employee pays it).

You can choose to operate as an individual if you like. This is perfectly normal for early stage companies. You should probably decide to create a Limited Company (Ltd) and register it, then set up a business bank account. It is easier if you do this before you start trading and the cost of registration is trivial.

You don't need to worry about trademarks, although you can register one or more if you wish.

You do need to keep records relating to business income and expenditure for several years. You can talk to an accountant about this, although it is trivial, so I just do it myself using a spreadsheet. If you don't have time to learn how to do it yourself, you could hire an accountant, but be prepared to pay for it.

The HMRC website has loads of free information about all this stuff. Starting a Ltd company can be done via the Companies House website. You might also find the Business Link website useful. Trademark information can be found at the government IPO website.

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When it comes to registering the business at companies house. What do I put for the shares / capital area? It will be owned by me and only me, so I don't see the point in shares? Also, what is 'business occupation'? – Bowersbros Jul 31 '12 at 9:59
It is traditional (though not necessary) to start a UK Ltd company with either 100 or 1000 shares of nominal value £1 each. This money is what you put in at the start and becomes the Capital. You don't need to allocate all the shares on day one, so you could issue 1000 and only allocate 100 to yourself. You need shares, as it is technically the shareholders who appoint the board of Directors, although in reality you will be the only shareholder and will appoint only yourself as Director. Business Occupation is like a SIC code used to maintain statistics. Choose one that matches your business. – Steve Jones Jul 31 '12 at 14:21
So we are a file hosting website, so Should my business occupation be 'Cloud Storage Service' or something? – Bowersbros Jul 31 '12 at 18:10
You can have that if you want, but it might be better to select a more generic one. In general, these labels are only used by government agencies (e.g. ONS, HMRC, etc) for statistical purposes. – Steve Jones Aug 2 '12 at 8:04
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I am not from the UK but for an online venture, you seem to be over thinking it. You are worried about taxes and expansion and records management for a online business which you aren't even sure if it can survive the first 3 months.

Why not just register the business and focus on whats important - getting customers, gaining traction and making money?

If it shows potential, then start looking into accounting, taxes, records etc. If it doesn't you saved yourself a lot of worry and time.

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