Sue Leathem, Partner at Chartered Accountants, JR Watson & Co, looks at challenges facing businesses in these uncertain times.
TIMES are still challenging but this still does not stop people from taking opportunities to either start their own business or invest in a buy-to-let business.
This includes many people who see this as a route to more financial independence and flexible working. From the outset, some have no intention of employing more than themselves and possibly a family member while others want to grow and create job opportunities.
Whatever the situation, it is important from the beginning to get the right structure in place for the business, the people in it and tax. Professionals will advise that basically so-called tax loopholes are disappearing and tax traps will catch the unwary.
For example, a few years ago the standard professional advice for anyone going into business was to set up a limited liability company. In recent years, the extensive changes to tax rules mean that now it is important that every situation must be considered on an individual case-by-case basis.
The Government has significantly changed the rules for income tax, corporation tax and VAT that once made incorporation very attractive but less so now. Issues like pensions are no longer just for the larger enterprises. Auto-enrolment means that from 2017 even the very small businesses are now part of the national pension auto enrolment process. Those business people who do not make the necessary preparations risk heavy financial penalties yet still many are still not prepared.
On the positive side, larger businesses are seeing the benefit of the reduction in corporation tax rates, but this is balanced by reduced allowances for capital expenditure and the new apprenticeship levy, which many would see as a tax under a different name.
For professional financial advice contact the firm, which has offices in Cheyne Walk, Northampton and Rugby, telephone 01604 630745 or visit the website at www.jrwatson.co.uk
